tyb/s
very nice
CIA-Backed Startup Builds 'Bots For The Next Generation Of ETFs
(Exchange-Traded Funds)
The Central Intelligence Agency was one of the early backers of an AI startup company called Kensho Technologies, once focused on analyzing North Korean missile launches, earthquakes and elections - at least, until 2014. That's when John van Moyland joined the company and its focus pivoted to finance, according to a new Bloomberg article.
S&P Global wound up buying the company last year and is now using it for yet another cause: developing the next generation of index funds. According to van Moyland, who's title is now "managing director and global head of S&P Kensho Indices", machines can design better indexes used as underlying products for passive investment vehicles like ETFs, which among other passive investment instruments, manage about $7.3 trillion in the U.S.
And so begins the race to create "robotic ETFs", which are essentially a bet that humans would rather trust their money to machine-picked passive instruments instead of human-picked ones. The robotic instruments are created using "far-flung data digested with natural-language processing, machine learning and AI," according to the article.
As of today, there are more than 2,000 ETF products on U.S. exchanges, meaning that every next one needs to stand out from the crowd more than the last. It's also a catch 22 for some fund issuers: the money lost from people turning to passive investing needs to be made up in ETF fees, which can only be justified from specialized products. While a normal ETF collects fees of as little as $0.20 on every $1,000 invested, AI designed ETFs can justify fees as large as $1.80 to $8 on that same $1,000 investment.
“None of this stuff is, you hand it over to a machine and you’re done with it. But increasingly you will see this machine learning, AI, whatever we call it, play an increasingly important role in the investment process."
And of course robots are great at mining data where humans may not be. They are thorough, persistent and capable of processing huge quantities of information. At least 20 funds now claims to use AI as a building block. One AI-driven ETF has already shuttered after failing to drum up interest.
Art Amador, co-founder of EquBot, which runs two ETFs that use IBM’s Watson platform told Bloomberg: “A lot of times, institutions are saying that they’re using AI and really all they’ve done is automate some process. It takes away from everything we’re doing.”
Some hedge funds and robo-advisors like Betterment LLC and Wealthfront Inc. have been trying to use technology to undercut rivals. Now, well known and established companies like Blackrock are trying to follow their lead.
Jeff Shen, co-chief investment officer of active equity and co-head of systematic active equity at BlackRock said: “It’s an extraordinary and exciting time. Nobody really has completely figured it out yet. The time is now.
https://www.zerohedge.com/news/2019-03-26/cia-backed-startup-builds-bots-next-generation-etfs
the original ETF mkt was created and grew like weed's in the mid 2000's-around 2006 and was a way for people to own something with out really owning it. This habbened mainly with commodity's and became the prevalent way for Wall St. to keep dreaming up new way's to 'innovate'. Most of these offer nothing moar than a paper promise to delivery whatever vehicle they track. The biggest mkt for these have been in the gold and silver mkts.
See here:
Gold & Silver ETFs
Many people do not understand the differences between buying physical gold, silver or other precious metals and buying paper metals products, such as a gold or silver-based ETF. Here we will look at the differences specifically between owning physical metals and owning shares of the gold based ETF GLD or the silver based ETF SLV.
If I Own Shares of GLD or SLV, Do I actually Own Gold or Silver?
Owning shares of GLD does not equate to owning actual physical gold. This is very important for potential investors to understand. Although the fund is based on gold and holds gold and/or cash as its only assets, share holders are not guaranteed to receive physical gold in exchange for their shares. That being said, one can exchange their shares for baskets of gold but it must be done through the fund’s trustee which is the Bank of New York Mellon.
rest at this link
https://www.jmbullion.com/investing-guide/paper-investments/gold-silver-etfs/
ty anon. was hoping a memefag could put a POTUS head on it.