Bots are better at picking stocks than humans
A new exchange-traded fund in which robots pick the stocks, which has been trading since October 18, is beating its human competitors
New York — There’s a new exchange-traded fund (ETF) where robots are picking the stocks — and so far it’s beating its human competitors.
Although it’s only been trading since October 18, the AI Powered Equity ETF, ticker AIEQ, which runs a proprietary quantitative model on IBM’s Watson platform, has picked some really hot stocks.
"It’s outperforming the S&P 500 thus far," Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch, wrote in a report on Thursday. He noted that the fund is benefiting from timing, "as tech funds see the biggest inflows in 38 weeks".
The ETF has posted a return of 0.80% since its inception, compared with 0.32% for the S&P 500 Index and 0.1% for the Nasdaq Composite Index over the same time frame.
The fund arrives as advanced technology and big data are making increasingly large waves on Wall Street. Firms such as Morgan Stanley and Wells Fargo, for instance, have recently launched robots that will help research analysts with things such as earnings reports and making stock trade recommendations.