Qraft Technologies has launched the QRAFT AI-Pilot U.S. Large Cap Dynamic Beta and Income ETF (ticker: AIDB), which is described as the first fully AI-powered risk-managed ETF in the market. The fund utilizes Qraft’s proprietary AI-powered risk model, leveraging over 70 macro and market data sets to assess factors such as momentum, volatility, and correlation.
AIDB aims to dynamically adjust its exposure between broad-based US Large Cap equities and cash/cash equivalents on a weekly basis, based on the AI’s assessment of market risk. The goal is to provide downside mitigation against extreme losses and lower volatility in investors’ portfolios.
The application of AI in actively managed funds is seen as a way to overcome the limitations of human decision-making and enhance risk management. Qraft believes that AI can offer better investment decision-making and risk management, particularly in times of market distress when emotions and biases can cloud judgment. AIDB seeks to capitalize on Qraft’s AI risk prediction model to provide dynamic equity exposure in the face of global market volatility.
The recent volatility in financial markets, driven by factors like heightened inflation and geopolitical unrest, has led investors to seek risk-managed strategies. AIDB aims to address this demand by providing a risk-managed approach that accounts for market risk based on the factors driving the markets. Unlike rule-based strategies that can lag behind market moves or actively managed funds subject to human emotion and bias, AIDB aims to deliver better equity risk management and minimize drawdowns over the long term.
Qraft Technologies has been providing AI-powered dynamic beta risk management solutions to institutional investors in South Korea since 2019. The launch of AIDB extends their AI-driven approach to a broader investor base, offering the potential to uncover greater opportunities and manage risk more effectively.
By leveraging the speed and predictive capabilities of AI, Qraft aims to unlock the power of AI to help investors navigate the market and achieve their investment goals. AIDB represents their commitment to applying AI to deliver innovative investment solutions that address the evolving needs of investors.