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Merlyn.AI Corporation Introduces an AI-Driven ETF WIZ

Sweta Jaiswal, FRM

AI has been taking over all business areas by storm. It helps enhance efficiency in almost everything, including advertising, healthcare, robotics, retail, video streaming, gaming and urban development.

From Amazon’s Alexa and Echo, Apple’s AAPL Siri, Waymo’s self-driving cars to Google’s GOOGL lens, the application of AI is all-encompassing. In fact, per the International Data Corporation, global spending on AI is forecast to reach $79.2 billion, at a CAGR of about 38% from 2018 to 2022 (read: Bet on BlackRock's Megatrends With These ETFs.

Keeping with the growing AI demand and applications, Merlyn.AI Corporation (MAI), a Palo Alto-based provider of exchange traded funds, launched the Bull-Rider Bear-Fighter ETF — WIZ — on Oct 17.

WIZ in a Nutshell

The WIZ ETF aims at enhancing performance during a bullish market and bear market defenses by using AI technologies to adjust to changing market conditions. The fund tracks the Bull-Rider Bear-Fighter index. The index attempts to choose the top momentum leaders during bull markets. It also switches to the Bear Market Strategy involving bonds, treasuries, gold ETFs, when markets seem to have an increased risk of decline. The fund has a net expense ratio of 0.95%.

Why Pick WIZ?

This fund will help beat traditional market indices by using advanced AI technologies like genetic algorithms, fuzzy logic and adaptive tuning. It is being expected that the utilization of AI will help develop techniques and grab opportunities to earn greater returns which human portfolio managers may miss.

ETF Competition

Per ETFdb.com, AI ETFs basically follow any of the three criterions:

First, the funds may particularly pick companies developing products or services, involved in technological enhancements in scientific research related to AI. Second, funds with a minimum of 25% portfolio exposure to companies spending heavily on AI. Finally, funds using AI techniques to pick individual stocks for portfolios like WIZ.

Notably, WIZ faces tough competition owing to the growing popularity of AI ETFs.

Below we discuss a few:

iShares Robotics and Artificial Intelligence ETF IRBO

The fund tracks investment results that correspond generally to the performance of the NYSE FactSet Global Robotics and Artificial Intelligence Index. Notably, the fund provides exposure to companies that could benefit from the long-term growth and advancement in robotics and AI. The fund has 85 holdings with an AUM of $49.4 million. The fund charges 47 bps in fees (read: Here's Why You Should Invest in Robotics ETFs).

First Trust Nasdaq Artificial Intelligence and Robotics ETF ROBT

The fund tracks investment results that correspond generally to the performance of the Nasdaq CTA Artificial Intelligence and Robotics Index. Notably, the fund provides exposure to companies involved in AI, robotics and automation. The fund has 99 holdings with an AUM of $62 million. It charges 65 bps in fees (read: Least-Hurt Tech ETFs on Renewed China Tensions).

Global X Robotics & Artificial Intelligence ETF BOTZ

The fund tracks investment results that correspond generally to the performance of the Indxx Global Robotics & Artificial Intelligence Thematic Index. Notably, the fund provides exposure to the performance of companies which benefit from increased adoption of AI, robotics and automation. The fund has 37 holdings with an AUM of $1.44 billion. It charges 68 bps in fees (read: ETFs to Gain as Surgical Robots Rise in Popularity).

AI Powered Equity ETF AIEQ

This actively-managed fund seeks capital appreciation by investing primarily in equity securities listed on a U.S. exchange based on the results of a proprietary, quantitative model. The fund has 130 holdings with an AUM of $112.7 million. It charges 77 bps in fees.

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Alphabet Inc. (GOOGL) : Free Stock Analysis Report
 
Apple Inc. (AAPL) : Free Stock Analysis Report
 
First Trust NASDAQ Artificial Intelligence and Robotics ETF (ROBT): ETF Research Reports
 
iShares Robotics and Artificial Intelligence ETF (IRBO): ETF Research Reports
 
Global X Robotics & Artificial Intelligence ETF (BOTZ): ETF Research Reports
 
AI Powered Equity ETF (AIEQ): ETF Research Reports
 
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