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Portfolio > Portfolio Construction

AI-Powered Equity ETF Launches on NYSE Arca: Portfolio Products

By Emily Zulz

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EquBot LLC, in partnership with ETF Managers Group, debuted an exchange traded fund (ETF) powered by artificial intelligence: the AI Powered Equity ETF (NYSE Arca: AIEQ).

AIEQ is an active ETF built on EquBot’s proprietary algorithms and is the first artificial intelligence (AI) ETF that utilizes the cognitive and big-data processing abilities of IBM Watson to analyze U.S.-listed investment opportunities.

EquBot’s approach ranks investment opportunities based on their probability of benefiting from current economic conditions, trends and world- and company-specific events, and it identifies those equities with the greatest potential for appreciation. EquBot and ETF Managers Group expect the fund’s portfolio to consist of 30 to 70 of U.S. equities with volatility comparable to the broader U.S. equity market. Its securities can be of any market capitalization and the expense ratio is 0.75%.

Artificial intelligence allows computer systems to perform tasks that would normally require human intelligence, such as visual perception, speech recognition, decision-making and translation between languages. In the case of AIEQ, the fund’s underlying technology is constantly analyzing information for approximately 6,000 U.S.-listed equities, including company management and market sentiment, and processes more than one million regulatory filings, quarterly results releases, news articles and social media posts every day.

“ETFs have made beta ‘smart,’ but with AIEQ we’re looking to make investing intelligent,” said Chida Khatua, CEO and co-founder of EquBot, in a statement. “EquBot AI Technology with Watson has the ability to mimic an army of equity research analysts working around the clock, 365 days a year, while removing human error and bias from the process.”

Khatua notes that the approach underpinning AIEQ also includes machine learning, giving it the ability to automatically learn and improve from experience without being explicitly programmed.

IndexIQ Launches Two Actively Managed Municipal Bond ETFs

IndexIQ launched the IQ MacKay Shields Municipal Intermediate ETF (MMIT) and the IQ MacKay Shields Municipal Insured ETF (MMIN), the latest additions to the firm’s fast-growing suite of fixed income ETF offerings.

MMIT and MMIN seek current income exempt from federal income tax. MMIT invests primarily in investment grade municipal bonds and seeks to enhance total return potential through the subadvisor’s active management approach.

MMIN invests principally in investment-grade municipal bonds covered by an insurance policy guaranteeing the payment of principal and interest and seeks to enhance total return potential through the subadvisor’s active management approach.

Both funds are actively managed by subadvisor MacKay Municipal Managers of MacKay Shields.

RobustWealth Partners with Apex Clearing to Offer Inclusive, Low-Cost ETF Trading 

RobustWealth, a digital wealth management platform designed by and for investment advisors, announced a new partnership with Apex Clearing.

The partnership bolsters RobustWealth’s platform and enables trading of ETFs, mutual funds and U.S. stocks included in the platform fee, as well as a rapid client onboarding experience, account linking, same-day funding and easy-to-use bank transfers.

As part of RobustWealth’s BaseCAMP suite, advisors’ clients will continue to benefit from the sophisticated rebalancing and trading of their goal- and risk-based portfolios in a completely private-labeled environment. Using Apex’s flexible technology, they can eliminate paper-centric onboarding processes and dramatically reduce the time it takes to open and fund new accounts to just a few minutes. 

FS Investments Launch Liquid Alternative Mutual Fund

FS Investments launched its first liquid alternative mutual fund, the FS Multi-Strategy Alternatives Fund (FSMMX (Class A), FSMSX (Class I).

The fund seeks to generate positive, low-correlated returns by combining best-in-class hedge fund managers and lower-cost alternative beta strategies.

It marries the institutional trend for hedge fund selection with alternative beta strategies in a cost-efficient manner and provides a single fund solution that brings an institutional-quality product to both retail and institutional investors.

BondWave Launches the New Engine for Fixed Income

BondWave, a leading financial technology firm focused on fixed income solutions, launcedh EffiTM, its new engine for fixed income.

Effi is a comprehensive and intuitive fixed income data warehouse platform bringing unbiased insight, transparency and intelligent solutions to the fixed income marketplace.

Designed to provide the same simplicity that users of Amazon and other consumer-oriented services have come to expect, Effi brings a similar ease of access for traders, advisors and investors to find the right bond among the universe of over 3 million active CUSIPs, according to BondWave. Users can access to a host of valuable fixed income data sets and tools on a single platform offering an evolving range of modular fixed income solution and workflow efficiencies.

Effi enables fixed income traders, advisors and investors to monitor and service accounts, identify and communicate trade ideas, and support client interactions. Users can access  a host of valuable fixed income data sets and tools, providing unparalleled context and workflow efficiencies.

Virtus Launches Global Factor Opportunities ETF

Virtus ETF Solutions, an affiliate of Virtus Investment Partners, Inc., introduced a global multi-factor ETF – the Virtus WMC Global Factor Opportunities ETF (VGFO), which seeks to outperform the MSCI All Country World Index.

VGFO employs a multi-factor approach based on quantitative and qualitative research and analysis. It seeks to identify investment opportunities by region and, within each region, allocate the fund’s assets to equity securities it believes share complementary factors.

The ETF invests primarily in equity securities of U.S. and foreign issuers, including emerging markets issuers, of any market capitalization. The fund is subadvised by Wellington Management Company LLP.

Capital Impact Partners Launches Fixed Income Notes to Support Underserved U.S. Communities

Capital Impact Partners announced an offering of up to $100 million of ‘AA’ rated fixed-income Capital Impact Investment Notes (Notes) that allows retail and institutional investors the opportunity to invest in the mission-driven organization’s nationwide efforts to create social impact for underserved communities.

Capital Impact is a non-profit corporation, certified by the U.S. Department of Treasury’s Community Development Financial Institutions Fund as a Community Development Financial Institution (CDFI).  Investors can earn a financial, as well as a social, return on their investments. 

Available for as low as $1,000,the Notes can be purchased by individual and institutional investors through their brokerage accounts. Th Investors can earn a financial, as well as a social, return on their investments. They are available at fixed interest rates with maturities that range from 1-10 years through Incapital LLC, a leading underwriter and distributor of securities. S&P Global assigned the Notes an ‘AA’ rating on September 7.

Capital Impact will use proceeds from the issuance primarily to support projects focused in the healthcare, education, affordable housing and community development sectors in underserved communities nationwide. These efforts are part of Capital Impact’s work to foster good health, job creation and economic development.

The prospectus, pricing supplements and information about how to invest will be available to the public on Capital Impact’s website and to financial professionals through Incapital’s LegacyTM platform, which offers products to investors that align financial goals with personal principles through values-based investing.

New Fund Targets Large, Late-Stage Venture-Backed “Unicorns”

Endowment Wealth Management, Inc. launched the EWM Unicorn Technology Fund, a private fund iseeking to raise up to $25 million to capitalize on opportunities in the secondary market for private, late-stage venture capital technology companies, which are often referred to as unicorns due to their rarity and size.

The Fund manager will seek to build a diversified portfolio of companies that it believes may experience a liquidity event in the next two to four years.

The Unicorn Technology Fund is currently fully invested across six such companies and the manager intends to add additional investments as the Fund grows and is available only to  accredited investors meeting certain income and net worth requirements.

–Check out Change Finance Launches Impact Investing ETF: Portfolio Products on ThinkAdvisor.

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