About Qraft Technologies
Founded in 2016, Qraft Technologies is on a mission to innovate the asset management process. From AI-powered ETFs to AI Order Execution, we seek to leverage AI to expand the capability of finding alpha without exponentially increasing the cost to achieve this goal.
The name Qraft is a portmanteau of the words ‘Quant’ and ‘Craft’, conveying the purpose of the company in crafting quantitative solutions for clients using our propitiatory AI technology. Qraft’s in-house, vertically integrated, AI suite offers it the ability to be nimble and always adapt to the changing needs and condition of the market. Qraft aims to continue to develop and provide a full comprehensive suite of AI-powered enabling services for financial firms, from building portfolio (Asset Allocation Engine), data handling (Kirin API), identification of alpha (Alpha Factory), to order execution (AXE). Our goal is to use technology to increase the accessibility of financial products for people everywhere.
October Key Takeaways
While economic growth continues in the US, the pace of recovery seems to be much slower than what was optimistically predicted in the past. The Delta-variant has played a part in adding to uncertainty, even while its infection peak has passed. China has been experiencing a series of slowdowns, which many investors worry may impact US markets[1].
US consumer sentiment has turned and is currently at the lowest point year to date. Consumers have been impacted by the end of the federal eviction moratorium as definitively decided in the Supreme Court in September[2], with many now facing months of unpaid rent due. It is estimated that there are over 6 million renters who owe a cumulative $41 billion in rent[3]. Federal unemployment benefits have also ended for millions of people, and many economists are worried that the rapid downward trend in unemployment figures actually indicates that many of those who have benefited from unemployment have decided to stay out of the labor markets[4] altogether. Labor shortages persist in key industries such as shipping and logistics, creating supply bottlenecks for many companies. This is coupled with the highest gas prices since 2014, further driving up operating costs.
With the Fed announcing that unemployment is the last hurdle to be cleared before it starts tapering asset purchases, October will be a crucial month in deciding when this taper starts[5].
Key Takeaways NVQ
Decrease in consumer discretionary sector
Big bet on big energy?
Intel remains top pick for three months & continuing supply issues for semiconductors
Semiconductor shortage hurts automakers -Ford removed from holdings
Key Takeaways AMOM
Facebook woes continue with Instagram whistleblower
Construction market turns around
Are some retail businesses better positioned to ride out supply issues?
AMOM on course to predict profit-taking trade for DocuSign again?
Key Takeaways HDIV
HDIV adds energy stocks to pursue high yield and growth strategy
Firms offering consumer staples and high dividend yields round out top holdings
Home Depot expected to benefit from increase in construction activity
Merck sees success in COVID treatment molnupiravir
AbbVie finalizes agreement to partake in age-related vision degeneration treatment
Texas Instruments increase dividend
Key Takeaways QRFT
QRFT decrease tilt in quality factor
QRFT increases momentum and size factor tilts
Portfolio holdings should not be considered investment advice.
[1] Wolf, Martin. “The Economic Threats from China's Real Estate Bubble.” Financial Times, Financial Times, 5 Oct. 2021, https://www.ft.com/content/1abd9d4b-8d94-4797-bdd7-bee0f960746a.
[2] Liptak, Adam, and Glenn Thrush. “Supreme Court Ends Biden's Eviction Moratorium.” The New York Times, The New York Times, 27 Aug. 2021, https://www.nytimes.com/2021/08/26/us/eviction-moratorium-ends.html.
[3] Cembalest, Michael. “Dude, Where's My Stuff?: J.P. Morgan Private Bank.” Private Banking & Wealth Management, 27 Sept. 2021, link
[4] Morath, Eric. “Falling Unemployment Could Add to Worries about the U.S. Labor Market.” The Wall Street Journal, Dow Jones & Company, 3 Oct. 2021, https://www.wsj.com/articles/falling-unemployment-could-add-to-worries-about-the-u-s-labor-market-11633269601.
[5] Timiraos, Nick. “Fed Tees up Taper and Signals Rate Rises Possible next Year.” The Wall Street Journal, Dow Jones & Company, 22 Sept. 2021, https://www.wsj.com/articles/fed-tees-up-taper-and-signals-rate-rises-possible-next-year-11632333617.
[6] “Surveys of Consumers.” Surveys of Consumers, University of Michigan, http://www.sca.isr.umich.edu/.
[7] Krauss, Clifford, and Peter Eavis. “Energy Prices Spike as Producers Worry over Pandemic and Climate.” The New York Times, The New York Times, 4 Oct. 2021, https://www.nytimes.com/2021/10/04/business/energy-environment/oil-and-gas-prices-clean-energy.html.
[8] “Sabic, ExxonMobil JV in U.S. Preparing for Initial Startup.” Reuters, Thomson Reuters, 19 Sept. 2021, https://www.reuters.com/business/energy/sabic-exxonmobil-jv-us-preparing-initial-startup-2021-09-19/.
[9] “Neste Sells Base Oils Business to Chevron.” Reuters, Thomson Reuters, 4 Oct. 2021, https://www.reuters.com/business/energy/neste-sells-base-oils-business-chevron-2021-10-04/.
[10] Jessica Resnick-ault David French. “Shell Exits Permian with $9.5 Bln Texas Shale Sale to ConocoPhillips.” Reuters, Thomson Reuters, 21 Sept. 2021, https://www.reuters.com/business/shell-nears-deal-sell-texas-shale-assets-conocophillips-95-bln-wsj-2021-09-20/.
[11] Stephen Nellis. “Intel Breaks Ground on $20 Bln Arizona Plants as U.S. Chip Factory Race Heats Up.” Reuters, Thomson Reuters, 25 Sept. 2021, https://www.reuters.com/technology/intel-breaks-ground-20-bln-arizona-plants-us-chip-factory-race-heats-up-2021-09-24/.
[12] Victoria Waldersee Stephen Nellis. “Intel to Invest up to 80 Bln Euros in Boosting EU Chip Capacity-CEO.” Reuters, Thomson Reuters, 7 Sept. 2021, https://www.reuters.com/business/autos-transportation/intel-says-it-will-reserve-ireland-chip-factory-capacity-automakers-2021-09-07/.
[13] Cembalest, Michael. “Dude, Where's My Stuff?: J.P. Morgan Private Bank.” Private Banking & Wealth Management, 27 Sept. 2021, https://privatebank.jpmorgan.com/gl/en/insights/investing/eotm/dude-where-is-my-stuff.
[14] Wells, Georgia, et al. “Facebook Knows Instagram Is Toxic for Teen Girls, Company Documents Show.” The Wall Street Journal, Dow Jones & Company, 14 Sept. 2021, https://www.wsj.com/articles/facebook-knows-instagram-is-toxic-for-teen-girls-company-documents-show-11631620739?mod=article_inline.
[15] Cambon, Sarah Chaney. “U.S. Economy Is Expected to Pick up Speed after Delta-Driven Downturn.” The Wall Street Journal, Dow Jones & Company, 29 Sept. 2021, https://www.wsj.com/articles/u-s-economy-set-to-pick-up-speed-after-delta-driven-downturn-11632907800.
[16] Scheepers, Ferdi. “7 Best Energy Sector Dividend Stocks.” Dividend Strategists, Dividend Strategists, 12 July 2021, https://www.thestreet.com/dividendstrategists/dividend-ideas/7-best-energy-sector-dividend-stocks.
[17] Jessica Resnick-ault David French. “Shell Exits Permian with $9.5 Bln Texas Shale Sale to ConocoPhillips.” Reuters, Thomson Reuters, 21 Sept. 2021, https://www.reuters.com/business/shell-nears-deal-sell-texas-shale-assets-conocophillips-95-bln-wsj-2021-09-20/.
[18] Redfin. “Sales of New-Construction Homes Rebound to Pre-Coronavirus Levels, Rising 10% in July.” Sales of New-Construction Homes Rebound to Pre-Coronavirus Levels, Rising 10% in July, 25 Aug. 2020, https://www.prnewswire.com/news-releases/sales-of-new-construction-homes-rebound-to-pre-coronavirus-levels-rising-10-in-july-301117619.html.
[19] Hopkins, Jared S., and Betsy McKay. “Merck Pill Intended to Treat Covid-19 Succeeds in Key Study.” The Wall Street Journal, Dow Jones & Company, 1 Oct. 2021, https://www.wsj.com/articles/pill-intended-to-be-covid-19s-tamiflu-succeeds-in-key-study-11633082401.
[20] Bell, Jacob. “AbbVie Bets Big on a Gene Therapy for Eye Diseases.” BioPharma Dive, 13 Sept. 2021, https://www.biopharmadive.com/news/abbvie-regenexbio-eye-gene-therapy-deal/606473/.
[21] Withers, Rachel Warren and Brian. “Here's Why AbbVie Is a Great Healthcare Stock for Long-Term Investors.” The Motley Fool, The Motley Fool, 29 Sept. 2021, https://www.fool.com/investing/2021/09/29/why-abbvie-is-great-stock-for-long-term-investors/.
[22] Witkowski, Wallace. “Texas Instruments Hikes Dividend 13%, More than Half of Free Cashflow Paid to Stockholders.” MarketWatch, MarketWatch, 15 Sept. 2021, https://www.marketwatch.com/story/texas-instruments-hikes-dividend-13-more-than-half-of-free-cashflow-paid-to-stockholders-11631739226.
Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call 1-855-973-7880 or visit our website at www.qraftaietf.com. Read the prospectus or summary prospectus carefully before investing.
The Funds are distributed by Foreside Fund Services, LLC
Investing involves risk, including loss of principal. The Funds are subject to numerous risks including but not limited to: Equity Risk, Sector Risk, Large Cap Risk, Management Risk, and Trading Risk. The Funds rely heavily on a proprietary artificial intelligence selection model as well as data and information supplied by third parties that are utilized by such model. To the extent the model does not perform as designed or as intended, the Fund’s strategy may not be successfully implemented and the Funds may lose value. Additionally, the funds are non-diversified, which means that they may invest more of their assets in the securities of a single issuer or a smaller number of issuers than if they were a diversified fund. As a result, each Fund may be more exposed to the risks associated with and developments affecting an individual issuer or a smaller number of issuers than a fund that invests more widely. A new or smaller fund's performance may not represent how the fund is expected to or may perform in the long term if and when it becomes larger and has fully implemented its investment strategies. Read the prospectus for additional details regarding risks.
While it is anticipated that the Adviser will purchase and sell securities based on recommendations by the U.S. Large Cap Database, the Adviser has full discretion over investment decisions for the Fund. Therefore, the Adviser has full decisionmaking power not only if it identifies a potential technical issue or error with the U.S. Large Cap Database, but also if it believes that the recommended portfolio does not further the Fund’s investment objective or fails to take into account company events such as corporate actions, mergers and spin-offs.
QRAFT AI-Enhanced U.S. Large Cap ETF: Companies in the health care sector are subject to extensive government regulation and their profitability can be significantly affected by restrictions on government reimbursement for medical expenses, rising costs of medical products and services, pricing pressure (including price discounting), limited product lines and an increased emphasis on the delivery of health care through outpatient services.
QRAFT AI-Enhanced U.S. Large Cap Momentum ETF: The Fund is subject to the risk that market or economic factors impacting technology companies and companies that rely heavily on technology advances could have a major effect on the value of the Fund’s investments. The value of stocks of technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, the loss of patent, copyright and trademark protections, government regulation and competition, both domestically and internationally, including competition from foreign competitors with lower production costs. Technology companies and companies that rely heavily on technology, especially those of smaller, less-seasoned companies, tend to be more volatile than the overall market.
QRAFT AI-Enhanced US High Dividend ETF: Securities that pay dividends, as a group, may be out of favor with the market and underperform the overall equity market or stocks of companies that do not pay dividends. In addition, changes in the dividend policies of the companies held by the Fund or the capital resources available for such company’s dividend payments may adversely affect the Fund. In the event a company reduces or eliminates its dividend, the Fund may not only lose the dividend payout but the stock price of the company may also fall.
QRAFT AI-Enhanced U.S. Next Value ETF: The value approach to investing involves the risk that stocks may remain undervalued, undervaluation may become more severe, or perceived undervaluation may actually represent intrinsic value. Value stocks may underperform the overall equity market while the market concentrates on growth stocks. The small- and mid-capitalization companies in which the Fund invests may be more vulnerable to adverse business or economic evens than larger, more established companies, and may underperform other segments of the market or the equity market as a whole. Securities of small- and mid-capitalization companies generally trade in lower volumes, are often more vulnerable to market volatility, and are subject to greater and more unpredictable price changes than larger capitalization stocks or the stock market as a whole.
Alpha – Alpha is a measure of the active return on an investment, the performance of that investment compared with a suitable market index.
AutoML – Short for Automated Machine Learning, AutoML is the automation of the machine learning process to make machine learning jobs simpler, easier, and faster.
Kirin API - Developed by Qraft’s data scientists, integrates multiple vendors to provide both macroeconomic and company fundamentals with the correct point-in-time data.