- Chris Natividad is the chief investment officer of artificial intelligence ETF provider EquBot.
- The firm uses IBM Watson-powered artificial intelligence to pick stocks for its family of ETFs.
- Natividad shares 5 stocks showing “prominent signals for a strong rally” in the next 3 months.
- See more stories on Insider’s business page.
Artificial intelligence-powered investing is not garnering as much attention as it used to, but it just might be making a comeback in the age of meme stocks and Reddit traders.
Just look at the Van Eck Vectors Social Sentiment ETF (BUZZ). The fund, famously backed by Barstool Sports’ Dave Portnoy, uses artificial intelligence technology to screen for stocks with positive investor sentiment. It has amassed about $250 million in assets and was up 12.9% since its launch four months ago.
EquBot, another ETF provider most well-known for launching the first artificial intelligence-powered equity ETF, also offers a family of funds poised to take advantage of the meme investing trend. The firm leverages IBM Watson-powered artificial intelligence to gather millions of data points every day to build on multiple predictive models.
“Utilizing IBM Watson and our own proprietary algorithms, our model is focused on what and who is moving the markets and how fast, so it helps us understand better not just what to invest in but when,” Chris Natividad, chief investment officer of EquBot said in a recent interview.
The timing is important. Despite the meteoric rise of AMC and GameStop this year, their upward trajectories are punctuated by periods of sharp declines. That’s why EquBot’s model averted GameStop when it was first surging in January.
During that initial spike, the model captured a huge spike in keywords sentiment through various social media channels, but it was also aware that GameStop is predominantly driven by other metrics such as in-store sales, the supply and demand dynamic for its products, and different foot traffic metrics, Natividad said.
“What happens is there’s a dynamic waiting because the system sees the market price is really dislocated from the traditional set of signals that have correlated to the GameStop price, and the confidence in the predictive financial model decreases,” he added. “Ultimately, it’s not going to take on that position, which was the right move as far as the timing when the system was ingesting that information.”
Because the two funds offered by EquBot — AI Powered International Equity ETF (AIIQ) and AI Powered Equity ETF (AIEQ) — are both actively managed, their portfolio turnover rate is on the higher end typically at around 2% per day. However, depending on the day and market dynamics, sometimes the data-dependent models would not signal any trades, Natividad said.
With a bird’s eye view of market sentiment and trends, Natividad recently shared five global stocks showing strong growth signals, as predicted by the AI model. The five stocks, along with their tickers, market caps, and commentaries, are listed below. (Natividad’s stock commentaries are as of June 30.)
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