Neither process nor people stand out at Amplify AI Powered Equity ETF, but it gets enough right to help this strategy retain its Morningstar Medalist Rating of Bronze. The portfolio maintains a sizable cost advantage over competitors, priced within the second-lowest fee quintile among peers.  

 The strategy earns an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in liquidity exposure and an underweight in quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The team managing the passive strategy earns the strategy an Average People Pillar rating. The strategy's parent organization earns the firm a Below Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

Norwegian Cruise Line

BlackRock

Merck

NVIDIA

Williams

Tesla

Block

Dick's Sporting Goods

Wingstop

Wayfair

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Amplify AI Powered Equity ETF earns an Average Process Pillar rating. The leading factor in the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The firm's five-year retention rate of 93% also contributes to the process. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 42%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup.

The investment strategy as stated in the fund's prospectus is:  The investment seeks investment results that generally correlate to the total return performance of the AI Powered Equity Index.  The fund uses a “passive” or indexing approach to try to achieve the fund’s investment objective. The index invests primarily in equity securities listed on the iShares Core S&P Total U.S. Stock Market ETF based on the results of a proprietary and quantitative model developed by EquBot Inc. (the “index provider”) that runs on the IBM Watson™ platform. EquBot is a technology-based company focused on applying artificial intelligence based solutions to investment analyses. 

 The portfolio is overweight in energy and consumer defensive relative to the category average by 16.3 and 7.1 percentage points, respectively. The sectors with low exposure compared to category peers are technology and financial services, underweight the average by 13.8 and 6.0 percentage points of assets, respectively. The strategy owns 110 securities and is diversified among those holdings. In its most recent portfolio, 36.7% of the portfolio's assets were concentrated in the top 10 fund holdings, compared to the category’s 54.8% average.

Average

Process

Amplify’s team earns An Average People Pillar rating. The most meaningful contributor to the rating is the firm's five-year retention rate of 93%. The size of the portfolio management team also influences the rating. With two portfolio managers, the fund is reasonably well-resourced. Lastly, the rating is limited by the managers' failure to consistently outperform peers at the funds they run, as measured by their combined three-year manager excess returns.

People

While differentiated from much of the competition, Amplify ETFs' concentrated lineup of largely thematic exchange-traded funds harbors considerable risk. It earns a Below Average Parent Rating.

Amplify targets niches not previously explored by larger ETF firms. This leads to product launches in relatively narrow parts of the market like cannabis, online retail, and battery technology. A recent acquisition of 12 mostly thematic ETFs from ETF Managers Group only enhances this focus. Products like these tend to be extremely concentrated and volatile, inviting significant risks to their investors, not the least of which are ill-timed purchases and sales. Because of these risks, product success is unpredictable and leads to more closures than there are among traditional strategies. Since its 2016 founding, Amplify has merged or liquidated several ETFs that failed to gain traction or produced poor results.

Five subadvisors are responsible for the day-to-day management of Amplify's 29 ETFs. The firm regularly reviews subadvisor activity and performance and risk data but does not have a dedicated risk management team. Overall, its subadvisory relationships seem to emphasize product development and distribution rather than long-term, proven investment merit.

Amplify ETFs does what it sets out to do—offer investors differentiated ETF strategies—and leadership comes with considerable ETF experience. The firm's ETFs are not cheap but neither are they particularly pricey. Many levy category-competitive fees. Few of Amplify's ETFs should be considered core holdings, but they can serve a purpose for investors seeking specific exposures so long as shareholders understand the risks embedded.

Below Average

Parent

Amplify AI Powered Equity ETF

AIEQ is an actively-managed fund of US stocks selected by a proprietary, quantitative model that incorporates artificial intelligence (AI).

AIEQ tracks an index that holds US companies of any market cap selected using a proprietary, quantitative model based on artificial intelligence.

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.

AIEQ: Time To Give This AI-Powered ETF The 'Old Yeller' Treatment

DoubleLine Commercial Real Estate ETF

Strategy Shares Gold-Hedged Bond ETF

Amplify Cybersecurity ETF

Amplify Mobile Payments ETF

Victoryshares THB Mid Cap ESG ETF

Amplify Junior Silver Miners ETF

Pacer Metaurus US Large Cap Target Dividend 300 ETF

Vaneck Bitcoin Strategy ETF

PGIM US Large-Cap Buffer 12 ETF - February

PGIM US Large-Cap Buffer 20 ETF - February

Tidal ETF Trust Intelligent Real Estate ETF

The past week saw a total of 13 ETF launches. There were also a host of material changes to existing funds, and some closure activity.

This Week in ETFs: A Baker's Dozen of New ETFs

Amplify Travel Tech ETF

Amplify Etho Climate Leadership US ETF

Amplify Video Game Tech ETF

Amplify Treatments Testing & Advancements ETF

Amplify BlueStar Israel Technology ETF

Amplify Global Cloud Technology ETF

Amplify Alternative Harvest ETF

Amplify US Alternative Harvest ETF

CHICAGO, Jan. 29, 2024 (GLOBE NEWSWIRE) -- Amplify ETFs announced today it has completed its previously announced acquisition of ETF Managers Group (ETFMG) exchange-traded fund (ETF) assets, which consist of over $3.7 billion of assets under management (AUM) across 14 ETFs (as of 1/26/2024). Amplify ETFs will now manage $9.1 billion of AUM as of 1/26/2024.

Amplify ETFs Completes Acquisition to Reach $9.1 Billion AUM Across 31 ETFs

WisdomTree International AI Enhanced Value Fund

BTD Capital Fund

Advisorshares Let Bob AI Powered Momentum ETF

Counterpoint Funds announced the launch of the Counterpoint Quantitative Equity ETF (NYSE Arca: CPAI). The ETF seeks long-term capital appreciation by investing in individual stocks that have exposure to multiple factors.

Counterpoint Debuts AI-Driven Quantitative Equity ETF

ProShares Short Bitcoin Strategy ETF

SPDR Dow Jones Industrial Average ETF

Defiance Pure Electric Vehicle ETF

Fidelity MSCI Consumer Staples ETF

Roundhill Magnificent Seven ETF

Roundhill Meme ETF

ProShares Short Ether Strategy ETF

Invesco S&P 500 Enhanced Value ETF

SPDR S&P 500 ETF Trust

Consumer Staples Select Sector SPDR Fund

Charlie Munger's investment philosophy, which prioritizes quality, selective investing, and a long-term perspective, can influence ETF investors to be discerning in their choices and avoid excessive diversification.

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AI Powered Equity ETF is an actively managed fund that uses deep learning technology. The fund is being reorganized and will be sold to Amplify ETFs. The AIEQ ETF has underperformed the S&P 500 Index and another AI-powered ETF, has high fees and turnover rate, and low liquidity.

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Global X MSCI China Real Estate ETF

iShares China Large-Cap ETF

Simplify Interest Rate Hedge ETF

Sprott Junior Uranium Miners ETF

United States Oil Fund LP

The third-quarter 2023 was a downbeat period for investors, mainly due to rising rates.

Baidu

Global X Robotics & Artificial Intelligence ETF

iShares Robotics & Artificial Intelligence Multisector ETF

ROBO Global Robotics and Automation ETF

First Trust Nasdaq Artificial Intelligence & Robotics ETF

Robots and artificial intelligence (AI) are increasingly gaining precedence in our daily life.

Guide to Artificial Intelligence ETFs

Breakwave Dry Bulk Shipping ETF

Amplify Transformational Data Sharing ETF

Breakwave Tanker Shipping ETF

Amplify Seymour Cannabis ETF

Amplify CWP Dividend & Option Income ETF

Amplify Online Retail ETF

In June, the ETF industry learned that issuer ETF Managers Group would be selling its funds to Amplify ETFs. The transaction, once completed, will bring Amplify's total AUM to $8 billion invested across 29 ETFs.

Amplify's Christian Magoon on Purchase of ETFMG's ETFs

Global X Artificial Intelligence & Technology ETF

Wisdomtree Artificial Intelligence And Innovation Fund

Nvidia (NVDA) injected bullishness across the tech sector, especially in the artificial intelligence (AI) segment.

Nvidia Sparks Rally in AI ETFs

The AI Powered Equity ETF is an actively-managed ETF that uses artificial intelligence to select U.S. stocks with high potential for success. AIEQ's returns through 2020 were solid and slightly beat SPY with higher volatility. However, it's performed poorly since, coinciding with an excessive turnover rate that topped 1,700% in 2022. A hefty 0.75% expense ratio, minimal AUM, and a poor track record against virtually every passive size and style segment means investors should avoid AIEQ.

AIEQ: 3 Reasons To Avoid This High-Risk AI-Powered ETF

Asian Growth CUBS ETF

TrueShares ESG Active Opportunities ETF

Hartford Schroders ESG US Equity ETF

Global X MSCI Nigeria ETF

Nightshares Russell 2000 ETF

Nightshares Russell 1000 ETF

Revere Sector Opportunity ETF

The week ending Friday, July 21, has been busy for the ETF industry, though launches were muted. A total of seven funds rolled out, which suggests the market could be entering some kind of summer slump.

This Week in ETFs: A Summer Slowdown

Roundhill Generative AI & Technology ETF

The AI hype surrounding the tech sector has boosted stocks this year. The rally is here to stay as the AI valuation is not too stretched.

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Qraft AI-Enhanced US Large Cap Momentum ETF

QRAFT AI-Enhanced U.S. Large Cap ETF

Vanguard Total Stock Market ETF

The AI Powered Equity ETF (AIEQ) has garnered attention recently, but not for positive reasons. Despite using artificial intelligence to make investment decisions, the ETF has struggled to perform well, with a disappointing one-year return of -13.92%.

Assessing the AIEQ ETF: Implications for AI Investing

The AI Powered Equity ETF has underperformed against all major market segments since its launch in 2017. To demonstrate, this article compares AIEQ's annual returns against nine passive alternatives. AIEQ's investment objective is to select stocks with a high probability of outperforming over the next twelve months. However, in the last year, its portfolio turnover rate skyrocketed to 1,700%. This feature is not a mark of confidence. Substantial changes are routine, and AIEQ does not consider ultra-concentration in any particular industry problematic. Semiconductors total 30% of today's portfolio.

AIEQ: Don't Be A Beta Tester, Avoid This Poor-Performing AI-Powered ETF

Harbor Corporate Culture Small Cap ETF

JPMorgan Equity Premium Income ETF

KraneShares Global Carbon ETF

US Treasury 3 Month Bill Etf

BondBloxx Bloomberg One Year Target Duration US Treasury ETF

On this episode of ETF Prime, host Nate Geraci had just returned from the Inside ETFs Conference and had some thoughts. So, he bounced some of his takeaways from the conference off of VettaFi's head of research Todd Rosenbluth.

ETF Prime: Todd Rosenbluth Considers Takeaways from Inside ETFs

The AIEQ ETF uses artificial intelligence to pick stocks. The fund analyzes millions of data points to rank over 6,000 stocks. It aims to select stocks that are most likely to outperform the markets.

AIEQ: Underperforms The S&P, Avoid

Global X Education ETF

Alphabet

Microsoft

The hype surrounding ChatGPT has brought about a massive change in the global financial and investment world. These ETF areas could emerge as winners and losers.

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AIEQ employs artificial intelligence to conduct market research on potential holdings and pick stocks using advanced algorithms. This ETF focuses on various companies across the economy that are most likely to prevail amid relevant market conditions and events.

AIEQ: Unique Strategy But Not Enough History To Prove Its Effectiveness

ARK Web x.0 ETF

Roundhill Sports Betting & iGaming ETF

SPDR Bloomberg 3-12 Month T-Bill ETF

BNY Mellon US Large Cap Core Equity ETF

SPDR Portfolio TIPS ETF

United States Natural Gas Fund LP

Investors are flocking to artificial intelligence (AI) ETFs, as well as short-duration Treasuries ETFs and zero-fee core equity exposure, reveals recent advisor research data.

Rising ETF Stars: Who's Afraid Of AI ETFs?

ARK Industrial Innovation ETF

MerlynAI SectorSurfer Momentum ETF

Teucrium Aila Long-Short Agriculture ETF

Defiance Quantum ETF

Merlyn AI Bull-Rider Bear-Fighter ETF

Franklin Exponential Data ETF

ETFs focused on artificial intelligence are popular right now, but there's a wide gulf between ETFs that use AI to invest and ETFs that invest in companies that benefit from or work on AI technologies. Let's drill deeper into the difference between the two.

Artificial Intelligence ETFs, or ETFs Powered by Artificial Intelligence?

AI Powered Equity ETF utilizes artificial intelligence to select stocks as part of its actively managed investing process. The AIEQ fund has underperformed the S&P 500 since its inception in 2017, lagging to the downside during periods of market volatility.

AI Powered Equity ETF: Performance History Leaves A Lot To Be Desired

All the craze lately has been surrounding artificial intelligence (AI). That has been giving the AI Powered Equity ETF (NYSEARCA: AIEQ ) a bit more attention as well.

Chatbot Craze Powers AI-Powered AIEQ ETF Higher

Celsius Holdings

UnitedHealth Group

Roku

ChatGPT is the artificial intelligence language bot that's been getting all kinds of press in 2023. However, when it comes to picking stocks, it can't hold a candle to the AI-powered equity ETF run by ETF Managers Group.

3 Top Buys From a Market-Beating ETF Powered by an AI Stock-Picker

The AIEQ ETF is fully invested in the stock market, which according to DataTrek Research means it expects a continuation of the recent equity rally.

These are the top 10 holdings of the AI-driven investment fund powered by Watson that has been crushing the market this year

News for Amplify AI Powered Equity ETF ETF (AIEQ)