How Are AI-powered ETFs Doing?

How do exchange-traded-funds (ETF) that employ artificial intelligence (AI) to pick assets perform? To investigate, we consider six such ETFs, all currently available, as follows:

• • Amplify AI Powered Equity ETF (AIEQ) – picks U.S. stocks based on a quantitative model that runs on the IBM Watson platform.
  • VanEck Social Sentiment ETF (BUZZ) – picks U.S. stocks with the most positive sentiment as determined from online sources via a rules-based quantitative methodology.
  • WisdomTree International Al Enhanced Value Fund (AIVI) – picks developed market value stocks outside the U.S. and Canada via a quantitative AI model. [We use data only since retention of an AI-oriented advisor at the beginning of 2022.]
  • QRAFT AI-Enhanced U.S. Large Cap Momentum ETF (AMOM) – picks momentum stocks via an investment strategy enhanced by the use of artificial intelligence.
  • Teucrium Aila Long-Short Agriculture Strategy ETF (OAIA) – takes long and short positions in agricultural securities via a strategy employing machine learning.
  • Teucrium Aila Long-Short Base Metals Strategy ETF (OAIB) – takes long and short positions in base metals securities via a strategy employing machine learning.

We use SPDR S&P 500 ETF Trust (SPY) for comparison, though it is not conceptually matched to some of the ETFs. We focus on monthly return statistics, along with compound annual growth rates (CAGR) and maximum drawdowns (MaxDD). Using monthly total returns for the six AI-powered ETFs and SPY as available through January 2024, we find that: (more…)