QRFT Resilient Towards Market Volatility

July 21, 2021 EDT

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 bubble1 that will soon burst and leave investors in pain.

Still, even during uncertain times, investment opportunities do exist. Investors who potentially identify alpha2 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:

  1. 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.
  2. 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%.


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.


Bubble – A bubble is an economic cycle that is characterized by the rapid escalation of market value, particularly in the price of assets.

Alpha – Alpha is a measure of the active return on an investment, the performance of that investment compared with a suitable market index.

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.