Warren Buffett and David Tepper’s Investment Expertise Powers New Chatbot-Driven Exchange-Traded Fund

The investment industry is abuzz with the launch of Intelligent Alpha’s first fund, an AI-driven exchange-traded fund (ETF) that leverages the power of large-language models to generate investment portfolios. The fund, dubbed LIVR, pays homage to Jesse Livermore, one of the most legendary stock traders of the early 20th century.

The Concept Behind LIVR

LIVR is the brainchild of Gene Munster, a well-known tech analyst and co-founder of Deepwater Asset Management. Munster partnered with Gene Clinton, who had been experimenting with ChatGPT to create a portfolio that could outperform the S&P 500 index. Clinton’s tinkering led to the development of 40 different strategies whose performances are measured against various indexes.

How LIVR Works

The fund uses large-language AI models (LLMs) like ChatGPT to generate investment portfolios based on various market scenarios and risk profiles. The LLMs analyze vast amounts of data, including news articles, financial reports, and other relevant information, to identify trends and patterns that inform the portfolio’s construction.

Key Features

• Ticker Symbol: LIVR
• Fee Structure: 0.69% expense ratio
• Investment Strategy: Dynamic portfolio construction using large-language AI models
• Human Oversight: Final human review to ensure compliance and regulatory adherence

The Market for AI-Driven ETFs

While the concept of AI-driven ETFs is still largely experimental, some existing funds have shown promising results. For instance, the Franklin Intelligent Machines ETF (IQM) has returned 19% year-to-date, outperforming the S&P 500 index.

However, many other AI-centered ETFs have seen limited inflows or outright outflows. Clinton attributes this to their reliance on traditional machine-learning techniques rather than large-language models like those used by LIVR.

Conclusion

The launch of Intelligent Alpha’s LIVR fund marks an exciting development in the investment industry, as it leverages the power of AI to generate investment portfolios. While the concept is still largely untested, the potential for improved performance and reduced risk makes it a compelling option for investors seeking innovative solutions.

As the market continues to evolve, one thing is clear: AI-driven ETFs are here to stay, and Intelligent Alpha’s LIVR fund is leading the charge.

Recommended Reading

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