As we mark the first anniversary of the LG QRAFT AI-Powered U.S. Large Cap Core ETF (NYSE: LQAI), it’s time to reflect on the incredible journey this innovative ETF has taken since its launch. In just 12 months, LQAI has not only established itself as a notable player in the ETF landscape but has also provided investors with unique opportunities to engage with cutting-edge technology and artificial intelligence.
A Year of Financial AI Innovation
From its inception, LQAI has aimed to harness the power of AI and machine learning to drive investment strategies. Artificial Intelligence (AI) has already brought enormous changes to our lives and now it’s the financial market’s turn. LQAI aims to make active investing more efficient by utilizing the technology of LG AI Research and Qraft Technologies, both of which are widely recognized for their expertise in AI.
Active investing has long been considered the work of highly skilled fund managers. They use their experience and judgment to select stocks that are expected to outperform within a defined universe and investment horizon, considering a variety of information including historical prices, financial reports, macroeconomic data, and the news. However, their limited information processing capabilities and cognitive biases can potentially lead to sub-optimal results.
LQAI's models can process enormous amounts of information, both quantitative and qualitative, seeking to do so faster and more accurately than human managers. LQAI also continuously takes in new data and repositions its portfolio every four weeks. By relying on data rather than emotion, this unbiased decision-making process has the potential to create positive returns over time.
LQAI’s hybrid structure and model assess the relative risk and return of each stock in the US large-cap universe, screening out stocks with higher vulnerability under current market conditions as assessed by the AI model. Once 100 stocks are selected, portfolio weights will be decided by the AI model, considering the expected returns of the selected stocks to build an optimal portfolio. This process is designed to achieve better risk-adjusted returns by considering both risk and return in portfolio construction. This allows investors to have a concentrated portfolio that seeks to achieve better capital appreciation than the market over time.
Looking Ahead
As we celebrate this milestone, the future looks bright for LQAI. The continued evolution of AI technologies aims to make active investing more efficient and dynamic. With an experienced management team at the helm, LQAI is well-positioned to adapt and thrive in the ever-changing market environment.
Congratulations to the entire LQAI team on this remarkable achievement! Investors, whether you’re already part of the LQAI community or considering joining, there’s no better time to explore what this ETF has to offer. Cheers to year one, and to the exciting journey that lies ahead!
To learn more about LQAI and the other Qraft ETFs (QRFT, AMOM) visit qraftaietf.com.
Investors should consider the investment objectives, risks, charges, and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call 1-855-973-7880 or visit our website at www.qraftaietf.com. Read the prospectus or summary prospectus carefully before investing.
The Funds are distributed by Foreside Fund Services, LLC
Investing involves risk, including loss of principal. The Funds are subject to numerous risks including but not limited to: Equity Risk, Sector Risk, Large Cap Risk, Management Risk, and Trading Risk. The Funds rely heavily on a proprietary artificial intelligence selection model as well as data and information supplied by third parties that are utilized by such model. To the extent the model does not perform as designed or as intended, the Fund’s strategy may not be successfully implemented and the Funds may lose value. Additionally, the funds are non-diversified, which means that they may invest more of their assets in the securities of a single issuer or a smaller number of issuers than if they were a diversified fund. As a result, each Fund may be more exposed to the risks associated with developments affecting an individual issuer or a smaller number of issuers than a fund that invests more widely. A new or smaller fund's performance may not represent how the fund is expected to or may perform in the long term if and when it becomes larger and has fully implemented its investment strategies. Read the prospectus for additional details regarding risks.
QRAFT AI-Enhanced U.S. Large Cap ETF: Companies in the healthcare sector are subject to extensive government regulation and their profitability can be significantly affected by restrictions on government reimbursement for medical expenses, rising costs of medical products and services, pricing pressure (including price discounting), limited product lines and an increased emphasis on the delivery of health care through outpatient services.
QRAFT AI-Enhanced U.S. Large Cap Momentum ETF: The Fund is subject to the risk that market or economic factors impacting technology companies and companies that rely heavily on technology advances could have a major effect on the value of the Fund’s investments. The value of stocks of technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, the loss of patent, copyright and trademark protections, government regulation and competition, both domestically and internationally, including competition from foreign competitors with lower production costs. Technology companies and companies that rely heavily on technology, especially those of smaller, less-seasoned companies, tend to be more volatile than the overall market.
LG QRAFT AI-Powered U.S. Large Cap Core ETF: Returns on investments in securities of large companies could trail the returns on investments in securities of smaller and mid-sized companies or the market as a whole. The securities of large-capitalization companies may also be relatively mature compared to smaller companies and therefore subject to slower growth during times of economic expansion. Large-capitalization companies may also be unable to respond quickly to new competitive challenges, such as changes in technology and consumer tastes. The market price of an investment could decline, sometimes rapidly or unpredictably, due to general market conditions that are not specifically related to a particular company, such as real or perceived adverse economic or political conditions throughout the world, changes in the general outlook for corporate earnings, changes in interest or currency rates, or adverse investor sentiment generally. In pursuing the Fund’s investment objective, the Adviser consults a database generated by the LG-Qraft artificial intelligence system, which automatically evaluates and filters data according to parameters supporting a particular investment thesis. For the database, LG QRAFT AI selects and weights portfolios of companies in the Universe listed on the New York Stock Exchange and NASDAQ to provide a balanced exposure to a variety of factors affecting the U.S. market including, but not limited to quality, size, value, momentum, and volatility. The Fund expects to hold 100 companies in its portfolio. While it is anticipated that the Adviser will purchase and sell securities based on recommendations by the U.S. Large Cap Core Database, the Adviser has full discretion over investment decisions for the Fund.
Alpha – Alpha is a measure of the active return on an investment, the performance of that investment compared with a suitable market index.
AutoML – Short for Automated Machine Learning, AutoML is the automation of the machine learning process to make machine learning jobs simpler, easier, and faster.
Kirin API - Developed by Qraft’s data scientists, integrates multiple vendors to provide both macroeconomic and company fundamentals with the correct point-in-time data.
Important Disclosures
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