AI powers this ETF. Here's how it works

Intelligent Alpha founder and CEO Doug Clinton joins Josh Lipton on Asking for a Trend to break down the investment firm’s new artificial intelligence-powered exchange-traded fund (ETF), Intelligent Livermore (LIVR), and how AI could transform trading.

“We have created an investment committee built on AI [with] three different large language AI models: GPT, Claude, and Gemini. They analyze data and a philosophy that we give those committee members, and then they create a portfolio of stocks that reflect whatever portfolio or exposure we want the AI to create for us,” Clinton explains to the Asking for a Trend team.

Intelligent Alpha launched its AI-powered ETF Wednesday on the Nasdaq. Clinton says the ETF “basically analyzes some of the world's greatest investors and traders" and then "constructs a portfolio that reflects those views."

Clinton tells Yahoo Finance that the ETF is currently exposed to major investing themes like AI through names like Meta Platforms (META), as well as global markets like Asia and Latin America. The AI-powered fund also has some defensive exposure with sectors like healthcare and consumer staples.

“There are also what I think are more contrarian names like Pinduoduo (PDD)... [which] was down 30% a month ago and there's kind of an alternative bet there. They think that stock might bounce back,” Clinton says.

While the AI tech responds to prompts to determine which equities to add to the ETF, Clinton clarifies that “a human analyst will review the portfolio to make sure there's no hallucinations that just don't make any sense.”

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.

This post was written by Naomi Buchanan.