The Qraft AI-Enhanced US Large Cap Momentum ETF, an exchange-traded fund driven by artificial intelligence, has retained its stake in e-commerce giant Amazon.com, while raising its stake inHome Depot Inc. and acquiring stakes in retailers Lowe’s Companies Inc. and Target Corp.
What Happened: The ETF’s latest portfolio after rebalancing at the end of September, showed that the fund has sold major chunks of its holdings, or entirely divested in, social media giant Facebook Inc., chipmaker Nvidia Corp. and retail giant Walmart Inc.
In addition, the fund has divested its stakes in software maker Adobe Inc. and chipmaker Texas Instruments Inc. The ETF has a history of accurately predicting the price movements of Tesla Inc. shares.
The fund continues to have Amazon.com as its largest investment with an 8.0% weighting, followed by home improvement retailer Home Depot with a weighting of 6.7% and Lowe’s with 3.3% weighting.
The other two stocks that make up the top five holdings in the AMOM portfolio are Targetwith a 2.9% weighting and consumer products giantColgate-Palmolive Company with 2.8%.
Prior to the rebalancing, the ETF had Amazon, Facebook, Nvidia, Walmart and Home Depot as its five largest stock holdings.
Why It Matters: AMOM, a product of South Korea-based fintech group Qraft, tracks 50 large-cap U.S. stocks and reweighs its holdings each month. The fund uses AI technology to automatically search for patterns that have the potential to produce excess returns and construct actively managed portfolios.
AMOM has delivered year-to-date returns of 7.8%, compared to its benchmark — the Invesco S&P 500 Momentum ETF— which has returned 15.7% so far this year.
The fund’s latest rebalancing shows it remains bullish on retail stocks ahead of the much-anticipated holiday shopping season while reducing its stake in companies such as Facebook, which has recently come under pressure from lawmakers, investors and customers.
A Facebook whistleblower revealed her identity on CBS’ “60 Minutes” last weekend and accused the social media giant of “betrayal of democracy.” The company’s Facebook, Instagram and WhatsApp platforms suffered a widespread outage for more than six hours on Monday, and the company's stock crashed on the day.
Price Action: AMOM shares closed 1.9% higher in Thursday’s trading at $355.09.
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