Canadian ETF provider Horizons ETFs, part of Mirae Asset Global Investments, has listed a global equity ETF relying on artificial intelligence for all security selection decisions on Toronto stock exchange.
The Horizons Active A.I. Global Equity ETF, also branded Mind, provides exposure to global equity indices, by selecting North American-listed ETFs.
The AI-driven ETF is sub-advised by Mirae Asset Global Investments which uses an investment strategy run by a proprietary and adaptive artificial intelligence system analysing data and extracts patterns.
The artificial intelligence system looks at more than 50 investment metrics including 80-day simple moving average, beta, sharpe ratio, money flow, 6-month relative performance, 90-day volatility, maximum drawdown, short interest and correlation.
The ETF’s holdings are rebalanced on a monthly basis to give the AI more flexibility around the investment allocation process, for which a few restrictions have been set such as cash and cash equivalent holdings, regional restrictions and country restrictions.
“The launch of Mind represents another milestone for Horizons ETFs and Mirae Asset’s global ETF business, as we strive to offer the best possible investment solutions through global collaborations,” said Taeyong Lee, president and global head of ETF Business at Mirae Asset Global Investments.
“Mind is expected to be able to more efficiently process market data and allocate assets than any human manager,” commented Steve Hawkins, President and Co-CEO of Horizons ETFs.
“Unlike today’s portfolio managers who may be susceptible to investor biases such as overconfidence or cognitive dissonance, Mind is devoid of all emotion. It is purely systematic in how it makes investment decisions.
“Despite Canadian investors slowly overcoming their home bias and wanting to invest in international markets, the expertise required for a global strategy can be costly and time-consuming for the average investor to pursue. In our view, an AI system, as an active manager in this space, significantly streamlines the process and makes buying a whole world of ETFs as easy as trading a single stock on an exchange,” added Hawkins.
Mirae Asset already uses artificial intelligence for the investment decisions of the Mirae Asset AI Smart Beta/Smart Beta Market Hedged fund, as well as these of the Mirae Asset AI Asean fund.
Horizon ETFs has over $8.9bn of assets under management and tallies 79 ETFs listed on the Toronto Stock Exchange.