QRFT Resilient Towards Market Volatility
Many retail investors are confused about the unprecedented market sentiment surrounding stocks in recent months. The SKEW index, or the “Black Swan Index,” hit its all-time high – SKEW measures the sentiment disparity between the mainstream investors and those who think the stock prices are about to fall.
Prominent investors like Michael Burry and Jeremy Grantham warning investors of a potential crash are exacerbating investors’ anxiety. They have been warning of an epic bubble [1] that will soon burst and leave investors in pain.
Still, even during uncertain times, investment opportunities do exist. Investors who potentially identify alpha [2] factors hidden in corners of the market may come out as market-beating winners. There are possibly two prerequisites to simultaneously defend against volatility and find winning stocks:
Diversification – A diversified portfolio help ensure a downswing of a single company or sector does not ruin the whole portfolio’s returns. By allocating assets across various industries and instruments, investors aim to reach long-term financial goals while minimizing risk. While minimizing risk may be important for most investors, exposure to market downturns can never be eliminated completely.
Active Strategy – An active strategy, constantly fine-tuning your portfolio depending on market factors, is needed in volatile times like today. Active strategy involves continuously monitoring market activities and exploiting profitable conditions. Unlike passive investors, active investors typically look at stock price movements several times a day.
Integrating both strategies can be challenging. However, there is one actively managed ETF that has been successful in doing both. Qraft AI-Enhanced U.S. Large Cap ETF (QRFT) has been standing out especially during volatile times.
The performance data quoted represents past performance. Past performance does not guarantee future results. Current performance may be lower or higher than the performance data quoted. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost. Returns less than one year are not annualized. Performance data current to the most recent month end may be obtained by visiting qraftaietf.com/qrft.
Market Price: The current price at which shares are bought and sold. Market returns are based upon the midpoint of the last bid/ask spread at 4:00 PM Eastern Time.
NAV: The dollar value of a single share, based on the value of the underlying assets of the fund minus its liabilities, divided by the number of shares outstanding. Calculated at the end of each business day.
Annual Expense Ratio is 0.75%.
QRAFT AI
QRFT’s AI aims to construct a portfolio that enhances the S&P 500 Index. Through deep learning both fundamental stock data and macroeconomic trends, Qraft Technologies’ proprietary AI selects its constituent securities that may reward investors with long-term capital appreciation. The portfolio is rebalanced on a monthly basis, ensuring the AI can change its portfolio as the market factors change. In March 2020, when the market was extremely turbulent due to Covid-19, QRFT was much more resilient to the downward pressure in the market and was also able to identify stocks that led the market’s rebound.
QRFT holds a balanced exposure of five main factors affecting the U.S. market: quality, size, value, momentum, and volatility. QRFT evaluates how each individual factor would affect a company over time and identifies 300 to 350 companies that have the greatest potential to outperform their U.S. large cap peers over the next three-month period.
[1] Bubble – A bubble is an economic cycle that is characterized by the rapid escalation of market value, particularly in the price of assets.
[2] Alpha – Alpha is a measure of the active return on an investment, the performance of that investment compared with a suitable market index.