As AI seeps into all corners of the market, Qraft Technologies is using AI to select stocks and rebalance its ETFs. Qraft Technologies head of AI ETFs Weldon Rice joins Catalysts to discuss how Qraft utilizes AI and how AI-enhanced ETFs compare to traditional ETFs.
Rice emphasizes that artificial intelligence is purely used to construct portfolios. However, he notes that humans construct the model itself: "We have experts here in-house that are helping to drive what data points are made and what types of models are being used and those sorts of things as we research more and more." He explains that once the AI model is created, it uses new monthly data to make investment decisions.
He points to a recent breakthrough in Qraft’s partnership with LGI Research, where the AI model can produce reports telling investors why it decided to pick certain stocks. "We think this is really the next step in AI innovation for investment decisions with AI," he explains. He adds, "The way that artificial intelligence looks at the market is very different from a human one. We’re just looking at it purely from the data perspective." Rice explains that these models provide a non-linear perspective on the market that humans are not usually able to see, giving Qraft’s ETFs a unique advantage.
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