Qraft rolls out latest AI-driven ETF with South Korea's LG

LG

07/11/2023 14:00

By Suzanne McGee
       Nov 7 (Reuters) - Qraft Technologies on Tuesday launched
its fifth exchange-traded fund (ETF) that relies on artificial
intelligence to select holdings, continuing its expansion of the
niche AI ETF market.
    The LG Qraft AI-Powered U.S. Large-Cap Core ETF  LQAI.N 
will combine Qraft's existing AI models with additional
AI-powered forecasting tools developed by LG  003550.KS , the
South Korean electronics conglomerate. 
    LG AI Research, a division of LG, has been applying
artificial intelligence to everything from supply and demand
forecasting to raw materials purchasing decisions. 
    Qraft is a financial technology firm based in Seoul, South
Korea that has developed and launched a suite of AI-powered ETFs
traded on U.S. exchanges. The company employs 70 data scientists
and has developed models based on financial markets data and
macro-economic indicators, said Francis Oh, Qraft's Asia Pacific
CEO.
    LG AI Research's 260-person engineering team adds large
language modeling tools, he said, referring to artificial
intelligence tools that are trained to recognize, understand and
analyze text.  
    Thirteen ETFs already incorporate AI into their investment
process, only two of which have outperformed broad market
indexes, according to data from Morningstar Direct. Simplify
Asset Management announced plans for a further three such funds
last month.
    "Good experiences will be the primary driver" of investor
acceptance of these AI-powered investment products, Oh said. 
    He said that stripping human emotion from the stock-picking
process is something investors will come to embrace. 
    The new ETF will use the AI model to build a 100-stock
portfolio. It will be rebalanced every four weeks.
    Investors will pay an annual fee of 0.75%, in line with
other Qraft ETFs.
    

 (Reporting by Suzanne McGee; editing by Michelle Price and Rod
Nickel)
 ((Suzanne.McGee@thomsonreuters.com;))