AIEQ - AIEQ: Time To Give This AI-Powered ETF The 'Old Yeller' Treatment
2024-04-18 16:51:39 ET
Summary
- AIEQ relies on several models powered by IBM's Watson to select stocks across all U.S. market segments. The ETF has a 0.75% expense ratio and $101 million in assets.
- Results in 2020 were strong. However, AIEQ's long-term track record is poor, lagging behind SPY by 62% since its November 2017 inception. AIEQ's six-month rolling win rate is only 38%.
- One of the advertised benefits of AIEQ's models is that they "learn" over time. However, portfolio turnover skyrocketed to 2719% last year, and results seem to be getting worse.
- In addition, the models consistently rotate into low-quality, highly-volatile stocks, which explains its poor track record. I view the risk as enormous.
- I've assigned a "Strong Sell" rating to AIEQ. The AI experiment failed, and investors should deploy capital into more stable alternatives.