Here’s what the robot fund that’s beating the S&P 500 is investing in now

Here’s what the robot fund that’s beating the S&P 500 is investing in now

A small struggle, led by technology, is shaping up for Tuesday, as a big earnings week is upon us and COVID-19 worries hover. One distraction right now — the war between short sellers and a group of stock enthusiasts behind GameStop

Shares of the videogame retailer are up 23% in premarket trading after Monday’s wild session. To some, this is stirring memories of the dot-com boom and bust, and fears history could repeat.

Maybe one day it will be easier, when the robots can do the thinking for us. That brings us to our call of the day, which comes from the DataTrek Research blog, who wonders whether a fund that relies on artificial intelligence for investing ideas and is heavy on tech stocks right now knows something we don’t.

DataTrek notes the AI Powered Equity
exchange-traded fund is up 12% year to date, versus a 2.6% gain for the S&P 500
and for 2020 was up 25%, versus an 18% gain, respectively. It has gained 101% from the March COVID-19 pandemic lows, versus a 72% gain for the S&P.

Electric-car maker Tesla
solar solutions group SunPower
chip group Advanced Micro Devices
energy technology group Enphase Energy
and tech giant Alphabet
are the top five holdings.

What DataTrek found was the fund’s top picks are more tech heavy than last October, when more cyclical flavored stocks such as health care group Pfizer
and automobile maker Ford
made it into the top 10.

“AIEQ seems to have been picking up a good bit of market ‘signal’ in the last 12 months, so the fact that it is lightening up on cyclicals at the top of the sheet and maintaining/increasing its exposure to disruptive tech names (TSLA, SPWR, ENPH) is interesting,” says DataTrek.

What it could mean? A human manager backing away from cyclicals at the moment could be a sign of cold feet over the progress of the COVID-19 vaccine rollout.

As the DataTrek folks say, this AI ETF’s plays mirror those of a successful hedge-fund manager of the 1990s — “well-known stocks that play well-understood themes. Perhaps the real power of artificial intelligence-powered investing is simply not overthinking things too much.”

The markets

Stock futures


are a bit mixed, while European equities
are higher. China’s CSI 300
and Hong Kong’s Hang Seng Index
lost more than 2% each. That is after the People’s Bank of China, in a surprise move, pulled funds from the financial system and reportedly warned of asset bubble risks.

The tweet

From Alexis Ohanian, husband of tennis star Serena Williams and co-founder of Reddit:

The buzz

Reporting ahead of the market open, shares of conglomerate General Electric
are rising as revenue beat forecasts. Still to come are health care group Johnson & Johnson
and financial services group American Express
After the close, tech giant Microsoft
coffee group Starbucks
and chip companies Advanced Micro Devices
and Texas Instruments

Shares of e-commerce website Etsy
are rising in premarket. That move seems to have coincided with a comment on Twitter
by Tesla Chief Executive Elon Musk, who said “I kinda love Etsy.

The Federal Housing Finance Agency house price index, the S&P Case-Shiller home price index, and consumer confidence data are all ahead.

European Union officials had a tense chat with pharmaceutical group AstraZeneca

on Monday over COVID-19 vaccine delays, and have threatened export controls of any vaccines produced in the region.

Alternative asset manager Apollo Global Management
says Chief Executive Leon Black will step down by July.

Lawmakers are moving forward with an impeachment trial of former President Donald Trump.

Shares of Chinese technology conglomerate holding company Tencent
pulled back, after Monday’s 11% surge that brought it near a $1 trillion valuation. And China’s central bank chief struggled to respond to a question regarding digital payment group Ant Financial, whose initial public offering has been delayed.

Random reads

Like any good Spaniard will tell you, naps are a good thing.

Snowball fights in locked-down U.K.? That could cost you.

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