LG, Qraft Technologies' AI-powered ETF trades on NYSE

South Korea’s LG Group and Seoul-based Qraft Technologies Inc. have jointly launched an exchange-traded fund (ETF) that selects holdings related to artificial intelligence. The ETF began trading on the New York Stock Exchange Nov. 7, Qraft said on Wednesday.

The vehicle, dubbed LG Qraft AI-Powered US Large-Cap Core ETF, invests 80% or more of its assets in 100 large-cap stocks in the US. The active ETF’s AI model rebalances the portfolio every four weeks.

The AI model is designed to proactively identify the relative strength of individual stocks by analyzing macro variables, fundamental data, and market trends far faster than humans can, Qraft said.

The ETF is the first financial product jointly developed by LG AI Research. The LG unit has developed models for supply-demand forecasting, raw materials purchasing and new chemicals discovery since its inception in 2020 and is expanding to the area of AI tech.  

LG AI Research developed its large-scale AI Exaone in 2021 and launched the 2.0 version of the model in July this year. The company is using Exaone 2.0 to process language and visual data on LG Group’s new material and new drug businesses.

Asked if LG will tap into the financial industry, a group official said it doesn’t have such plan and the ETF project is just for checking the AI model. The electronics giant has been out of the financial sector since 2002 when it sold its credit card business to Korea’s Shinhan Financial Group.

Qraft Technologies is a fintech firm that uses AI for investing. It offers various investment solutions including a security selection engine, an asset allocation engine, a robo-advisory solution and an order-execution system. The company has received $146 million from SoftBank Group.

Write to Ik-Hwan Kim at lovepen@hankyung.com

Jihyun Kim edited this article.