Apple and Nvidia Are Picked by Robot Trader That Dumped Google and Meta

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Apple

and

Nvidia

were two stocks singled out for gains in March by a fund with holdings picked by artificial intelligence. which also decided to dump shares in two other tech giants.

AI-powered investor Qraft, a SoftBank-backed South Korean fintech with around $50 million in assets across four exchange-traded funds, ditched a big position in Google’s parent,

Alphabet

(ticker: GOOGL), this month. It also unloaded a stake in

Meta Platforms

(FB).

Its

Large Cap Momentum ETF
(AMOM) went bullish on

Apple

(AAPL) instead, scooping up enough stock to make it the fund’s largest holding with a portfolio weight of 7.9%.

Alphabet

and

Meta

were previously AMOM’s largest and third-largest positions, respectively.

Nvidia

(NVDA) remains the second-largest holding in the fund, with a portfolio weight of 6.6%

Alongside Apple, other major additions to AMOM in March include

Qualcomm

(QCOM),

ConocoPhillips

(COP),

EOG Resources

(EOG), and

Palo Alto Networks

(PANW). Besides Alphabet and Meta, the robot trader exited big positions in

Applied Materials

(AMAT),

Target

(TGT), and

Colgate-Palmolive

(CL).

After Apple and Nvidia, the list of AMOM’s top-five largest holdings is rounded out by

Home Depot

(HD) and

Costco

(COST), as well as Qualcomm.

The past few months have been unkind to AMOM, which consistently outperformed its benchmark—the S&P Momentum Index—through 2020 and 2021. By near the end of 2021, AMOM had returned 27.3% in price, compared with the S&P Momentum Index’s 24.5% over the past year. But one-year returns now stand at a loss of 15%, compared with an 8.6% gain for its benchmark.

This has been a tough year for the stock market. 2022 began strong, but stocks were soon upended by inflation fears and rising expectations of tighter monetary policy from the Federal Reserve, including the first interest-rate increases since 2018. 

Then Russia invaded Ukraine, leading to unprecedented financial sanctions on Moscow and extreme volatility in commodity markets, further stoking inflationary fears and threatening wider economic disruption.

“The COVID pandemic is finally dying down as many developed countries have started to drop all related restrictions,” said Francis Geeseok Oh, a managing director at Qraft and the head of its Asian-Pacific business. “However, COVID uncertainty has been replaced by the Russian war on Ukraine.”

So far, the fresh bets in March look like a mixed bag in a volatile market. As of midday Wednesday, Apple had fallen 4.5% since the end of February, with Qualcomm down 14% and

Palo Alto Networks

8% lower.

ConocoPhillips

and EOG are both up around 1%.

By comparison, the wider

S&P 500
index has declined 2.5% over the same period and the tech-heavy

Nasdaq Composite
remains deep in correction territory, having tumbled 5% in March.

“Geopolitical concerns will continue to factor in the short-term and long-term, as implications from the war in Ukraine have far-reaching consequences in all sectors of the economy including oil, agricultural commodities, automotive, and tech,” AMOM’s fund manager added.

Qraft’s other AI-picked ETFs are focused on U.S. large-caps broadly (QRFT), as well as value-stock U.S. large-caps (NVQ) and high-dividend U.S. large-caps (HDIV).

Theoretically, researchers have shown that AI investing strategies can beat the market by up to 40% on an annualized basis, when tested against historical data, though some experts caution that AI-run funds won’t “crack” the code of the stock market.

The entrance of AI-run funds onto Wall Street promised a new high-tech future for investing, though it hasn’t quite lived up to the hype yet.

Write to Jack Denton at [email protected]