Equbot, a technology firm that became part of the IBM Global Entrepreneur start-up program to innovate investment solutions with the use of artificial intelligence (AI), has launched its first product. The AI Powered Equity exchange-traded fund (ETF) (NYSE: AIEQ) is responding to investor demand for US equity investments with broad index volatility levels. ETF Managers Group, LLC (ETFMG) is the investment adviser to the AI Powered Equity ETF.

The AI Powered Equity ETF (NYSE: AIEQ) which deploys technology powered by IBM Watson and EquBot's proprietary algorithms, seeks to provide investment results that exceed broad US Equity benchmark indices at equivalent levels of volatility. The fund typically invests in 40-70 names but analyses and compares thousands of US companies on a daily basis to find and optimize exposures within the portfolio.

The fund applies proprietary analytical algorithms to artificial intelligence technology, which can process over one million pieces of information per day, to build predictive financial models on approximately 6,000 US companies. The technology continually analyses data and models in its active stock selection process, and derives an optimal risk adjusted portfolio consisting of 30 to 70 companies with high opportunities for capital appreciation. The fund is actively-managed and discloses all portfolio holdings daily.

IBM's Watson Artificial Intelligence is a cognitive computing platform capable of answering natural language questions by connecting large amounts of data, both structured (e.g., spreadsheets) and unstructured (e.g., news articles), and learning from each analysis it conducts to produce a more accurate answer with each subsequent question.

USAA debuts factor-based ETF range
USAA has launched a new suite of exchange-traded funds which focuses on factor-based equity funds and actively managed fixed income funds on NYSE Arca.

The new suite of ETFs, which consists of four smart beta equity ETFs and two fixed income ETFs, was built as a core portfolio-building solution, providing investors more choices at a competitive entry point. The smart beta equity ETFs strategy is to focus on two primary factors: value and momentum, which identify stocks with attractive valuations and positive price momentum. The strategy includes holdings that are weighted in such a way to help diversify the risk of the individual holdings.

The four new smart beta equity ETFs include USAA MSCI USA Value Momentum Blend Index ETF (ULVM), which has a net expense ratio of 20 basis points; USAA MSCI USA Small Cap Value Momentum Blend Index ETF (USVM), which has a net expense ratio of 25 basis points; USAA MSCI International Value Momentum Blend Index ETF (UIVM), with a net expense ratio of 35 basis points; and USAA MSCI Emerging Markets Value Momentum Blend Index ETF (UEVM), which has a net expense ratio of 45 basis points.

The new actively managed fixed income are the USAA Core Intermediate-Term Bond ETF (UITB), which has a net expense ratio of 40 basis points, and the USAA Core Short-Term Bond ETF (USTB), which has a net expense ratio of 35 basis points.

Premia Partners enters HK ETF market with first smart beta China tracker
Premia Partners has entered the ETF market with the launch of the first multi-factor smart beta China equity ETFs in Hong Kong. The new Premia CSI Caixin China Bedrock Economy ETF and the Premia CSI Caixin China New Economy ETF, were listed on the Hong Kong Stock Exchange (HKEX) on October 24.

The ETFs are designed to track the CSI Caixin Bedrock Economy Index and the CSI Caixin New Economic Engine Index. The index customisation is provided by Caixin Rayliant Smart Beta, a joint venture between Caixin, a Mainland financial media publisher, and Hong Kong's Rayliant Global Advisors.

The ETFs utilise a fundamental, multi-factor approach to replicate the composition of their underlying indexes through the Stock Connect between the Mainland and Hong Kong. The Stock Connect enables Hong Kong investors to access Mainland stock markets, and allows Mainland investors to trade Hong Kong-listed stocks. There are currently 157 ETFs listed on the HKEX.

Cambria Funds eyes covered call tracker
US asset manager Cambria Funds has filled on the US Securities & Exchange Commission (SEC) the Cambria Covered Call Strategy ETF, a fund of funds options-strategy that will be actively managed and invest primarily in other ETFs, exchange-traded notes (ETNs) exchange traded currency trusts, and closed-end funds that offer diversified exposure, including inverse exposure, to global regions (including emerging markets), countries, styles (i.e., market capitalization, value, growth, etc.), and sectors.

The ETF will also write (sell) quarterly exchange-traded covered call options on each of the fund's positions in the underlying vehicles that have strike prices ranging from at-the-money to 3% out-of-the-money. Under normal circumstances, the fund invests at least 80% of its net assets (plus borrowings for investment purposes) in an integrated strategy comprised of underlying vehicles and writing (selling) call options on the underlying vehicles in order to reduce the fund's volatility, and provide steady cash flow from premiums.

The fund's investment adviser, Cambria Investment Management will actively manage the ETF's portfolio using a quantitative strategy with risk management controls in an attempt to protect capital.

Virtus and Wellington rollout multi-factor ETF
Virtus ETF Solutions, an affiliate of Virtus Investment Partners, has launched the Virtus WMC Global Factor Opportunities ETF (NYSE Arca: VGFO), subadvised by Wellington Management Company.

VGFO employs a multi-factor approach based on quantitative and qualitative research and analysis. It seeks to identify investment opportunities by region and, within each region, allocate the fund's assets to equity securities it believes share complementary factors.

The fund, which seeks to outperform the MSCI All Country World Index, invests primarily in equity securities of US and foreign issuers, including emerging markets issuers, of any market capitalization. Gregg R. Thomas, CFA, senior managing director, and Thomas S. Simon, CFA, FRM, managing director, both of Wellington Management, are portfolio managers of VGFO.

Franklin Templeton introduces first suite of country-specific passive ETFs
Franklin Templeton Investments has launched a suite of 16 single country and regional market-cap weighted ETFs. These ETFs will be listed on NYSE Arca on Monday, November 6, in one of the largest simultaneous listings on the NYSE in the last decade.

These new passive ETFs will allow investors to gain exposure to a specific region or country at a low, cost-effective fee. The funds' expense ratios are among the lowest in the industry for their respective categories, empowering more investors with the ability and options to realize the full potential of beta-driven solutions. The suite consists of ETFs that will target exposures to developed countries at an expense ratio of 0.09% and emerging markets at 0.19%.

The new ETFs will be market cap-weighted and benchmarked to country and regional indices from FTSE Russell, leveraging the global index provider's capabilities and expertise across developed and emerging markets. FTSE Russell is one of the largest index providers in the marketplace globally, with approximately $15tr in assets currently benchmarked to its indexes.

Through its Franklin LibertyShares ETF platform, the firm currently offers an actively managed suite of equity and fixed income ETFs, and a smart beta suite covering both US and international equity markets. Franklin LibertyShares has over $938m in assets under management globally as of September 30, 2017.