As exchange-traded funds focused on the artificial intelligence revolution continue to enter the market, there are questions about whether using AI algorithms for stock selection provides an informational advantage. Todd Rosenbluth, head of research at VettaFi, suggested that it could be a smarter approach to picking stocks due to the lack of emotional influence. VettaFi has observed increased interest in actively managed ETFs driven by AI, such as the QRAFT AI-Enhanced U. S. Large Cap Momentum ETF (AMOM), which uses AI to select large-cap stocks like Nvidia, Walmart, Home Depot, and O'Reilly. Rosenbluth also mentioned Teucrium ETFs, which incorporate AI technology in selecting commodity funds. The AiLA Long-Short Agriculture Strategy ETF (OAIA) and the AiLA Long-Short Base Metals Strategy ETF (OAIB) both utilize machine learning to generate returns regardless of market direction.

The AI Powered Equity ETF (AIEQ), one of the oldest AI-driven ETFs, relies on IBM's Watson platform to analyze U. S. companies. However, AIEQ's performance has trailed behind the market, gaining 14% compared to the S&P 500's nearly 18% climb in 2023. While the information advantage of AI in stock selection remains unproven, Rosenbluth highlighted that AI-guided funds like AMOM have shown advantageous indicators compared to their flagship competitors, such as the iShares momentum ETF (MTUM). AMOM, which rebalances monthly, has outperformed MTUM, which rebalances every six months, with a positive year-to-date performance of over 21% for AMOM compared to MTUM's relatively flat performance in 2023.