This ETF Uses AI to Help it Find Value Stocks

Artificial intelligence (AI) has been a hot investing theme in 2023. And there are even exchange-traded funds (ETFs) that you can invest in which utilize AI. One example is the WisdomTree International AI Enhanced Value Fund (NYSE Arca:AIVI) , which uses an AI model to help pick stocks from international markets outside of Canada and the U.S.

The ETF uses an AI-driven approach to identify stocks that are undervalued relative to their intrinsic value, a strategy that has historically been a cornerstone of value investing. The fund predominantly invests in large and mid-cap stocks across various sectors, aiming to provide diversified exposure while targeting stocks with the potential for higher returns.

The utilization of AI in the fund’s investment strategy allows for a more dynamic and responsive approach to market changes. AI algorithms analyze vast amounts of data, including financial statements, market trends, and macroeconomic indicators, to identify undervalued stocks that human analysts might overlook. This technology-driven approach can adapt to new information more quickly than traditional methods, potentially leading to better risk-adjusted returns.

Some of the top holdings in the fund include Zurich Insurance Group, Hondo Motor, and British American Tobacco. There’s some excellent diversification here for investors as the top 10 stocks only account for 25% of the fund’s overall portfolio. A little over one-fifth of the ETF’s holdings are based in Japan, 17% are U.K. businesses, and 10% of stocks are based in Australia.

For investors looking to globalize their portfolio while also collecting a relatively high yield of 5.3%, the WisdomTree International AI Enhanced Value Fund can make for a great investment option.