ETFs
Why this ETF fund is reducing its allocation to Nvidia
Qraft Technologies reduced its allocation of Nvidia (NVDA) in its AI-enhanced US large-cap ETF (QRFT) from more than 6% in May to only 0.7% in June. Weldon Rice, Head of AI ETFs at Qraft Technologies, joins Catalysts to discuss the reasons behind this decision.
Rice reiterates that Qraft is an AI investment technology company that uses AI to select stocks in its portfolios and changes its holdings each month. “What we’ve seen over the years with our ETFs, which are now over five years old, is that sometimes they tend to want to take profits on some of these stocks. And Nvidia is one that has experienced “An incredible year so far and so we had a great May, so we think the AI model thought it was a great time to take profits,” he explains.
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This article was written by Melanie Riehl
Video transcription
Volatile week for the video here, but it didn’t derail the overall market rally as AI improved the US large-cap ETF that is under the ticker symbol.
QR FT reduced its allocation and video by over 6% in May.
Now just 0.7% in June.
Joining us now to discuss this, we are Weldon Rice.
He’s Craft Technologies, head of AI ETF Weldon, excited to talk with you.
Thank you for coming to the show.
I mean let’s start with exactly that, lowering your NVIDIA allocations by that much is a curious move given the overall market rally we’ve seen, I mean a third of the S and PS rally was attributed to NVIDIA alone. .
What is the justification?
Of course.
Uh, thanks for having me and uh yeah, just for uh you know, for the viewers who might not know who we are.
We’re an AI investment technology company, and for QR FT and our three S ETFs that we have, we use artificial intelligence to actually select stocks in the portfolio.
And so yeah, uh, this last rebalance, uh, we had, uh, we, we, we had changed the holdings every month and, uh, NVIDIA, you know, suddenly dropped, you know, that was one of the best holdings from the previous month went from 6% to, you know, just under 1% in the portfolio.
And, uh, you know, what we’ve seen over the years with our S ETFs that are now over five years old is that they tend to, you know, sometimes want to take profits on some of these actions.
And, you know, NVIDIA is one that has, you know, had an incredible year so far and had a great May.
So, you know, we think the AI model thought this was a great time to take profits.
The story continues
Um, you know, so despite, uh, you know, not having NVIDIA at the top, uh you know, it’s up about 5.3% this month, uh in terms of performance, which outperforms the S and P so you can consider it one of the few funds that probably outperforms the SNP, you know, without NVIDIA.
Um, so I think that’s pretty interesting.