Warren Buffett and David Tepper's Investing Expertise Powers New AI-Driven Chatbot ETF

In an innovative move, a new exchange-traded fund (ETF) has been launched that leverages the power of artificial intelligence (AI) to generate investment portfolios. The fund, called the Jesse Livermore ETF (LIVR), pays homage to one of the early 20th century’s most legendary stock traders and is backed by the brainpower of investing luminaries Warren Buffett and David Tepper.

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The AI-Driven Approach

The ETF uses large-language AI models to create portfolios that aim to outperform traditional indexes. The fund’s founder, Gene Munster, has filed for other ETFs as well and aims to tailor his offerings to both retail and institutional investors. The company, an affiliate of Deepwater Asset Management, is built to use large-language AI models for portfolio management.

A New Era in Investing

The idea for the ETF arose last year when Munster started experimenting with ChatGPT to create a portfolio that could beat the S&P 500. Over time, his tinkering turned into 40 different strategies whose performances are measured against various indexes, and led to the founding of Intelligent Alpha.

Challenges Ahead

While AI-centered ETFs have gained popularity in recent years, there is still limited evidence to support their effectiveness. Of the 16 AI-centered ETFs in the U.S., only one has outperformed the S&P 500 this year, and many have seen tiny inflows or outright outflows.

The Human Touch

While the fund relies on AI models to create portfolios, there is human oversight to ensure that the portfolio meets regulatory and compliance constraints. The fund charges a 0.69-per-cent fee and may invest in companies that Buffett’s Berkshire Hathaway conglomerate does not hold.

The Future of Investing

The launch of this ETF marks an exciting new chapter in the world of investing. As AI technology continues to evolve, it will be interesting to see how it impacts the investment landscape. Will we see a new era of high returns and low fees? Only time will tell.

The Numbers Don’t Lie

Of the 16 AI-centered ETFs in the U.S., only one has outperformed the S&P 500 this year. The Franklin Intelligent Machines ETF (IQM) returned 19 per cent, while the stock index gained 18 per cent as of last close.

The Rest of the Story

Only one other AI-centered ETF has seen meaningful inflows, taking in more than US$1 billion this year. That’s followed by a $117 million haul for the Roundhill Generative AI & Technology ETF (CHAT). The rest have seen tiny inflows or outright outflows year-to-date.

What Does This Mean?

Conclusion

The Jesse Livermore ETF (LIVR) is a bold new move into the world of AI-driven investing. With its 0.69-per-cent fee and human oversight, this fund aims to bring the power of AI to individual investors while minimizing the risks associated with automated trading systems.