Israel-based fund manager FINQ announced on Tuesday that it has entered the U.S. exchange-traded fund market with two large-cap equity ETFs that the company says will be operated entirely by artificial intelligence. According to FINQ, human staff will retain roles limited to oversight and governance, while the AI will conduct the day-to-day decisions around portfolio construction and management.
FINQ identified the two funds by ticker as AIUP and AINT, and said they are the first funds of this kind to receive approval from the U.S. Securities and Exchange Commission. The company described the product as part of a nascent category in which the AI model itself performs selection, design and ongoing management of the holdings, rather than merely assisting human portfolio managers.
The firm contrasted this approach with more familiar uses of technology in asset management. In many parts of the investment industry, AI is deployed as a supportive tool that augments human decision-makers; algorithmic trading, by contrast, typically involves humans designing rules or models that then trigger automated execution when set conditions arise. FINQ said its model differs from both of those approaches because the AI will make and execute portfolio decisions directly, subject to governance by people.
"FINQ is built on a data-only system that makes investment decisions much better than humans, as it has the ability to process immense amounts of data, without the disadvantages aligned with human fear, greed, urgency to act and other disabling human attributes," said Eldad Tamir, the founder and CEO of FINQ. "The future of investing lies in systematic, data-driven decision-making."
FINQ described its proprietary framework as continuously ranking all 500 stocks in the S&P 500 index. That ranking system, the firm said, serves as the basis for choosing which securities to hold, how to weight them and when to rebalance the portfolio.
Commentary from industry analysts recorded mixed experience with applying automated systems to stock selection. The article cited an example from 2023 in which another asset manager, Simplify Asset Management, introduced three SEC-approved ETFs that primarily rely on AI to pick holdings, indicating the idea has begun to gain regulatory traction.
However, Bryan Armour, an ETF analyst at Morningstar, cautioned that early attempts to use AI for stock selection have encountered difficulties. He noted some funds previously operating under similar premises experienced extremely high turnover, saying, "Some had turnover of 2,000%. Of course, AI may not have been as 'intelligent' then as it seems to be becoming."
FINQ's announcement positions these ETFs as an experiment in fully automated portfolio management under regulatory approval, with the firm emphasizing data-driven processes and human oversight limited to governance functions. The broader investment community will be watching performance, turnover and operational resilience as these funds begin to operate in the U.S. market.
Summary
FINQ has launched two U.S. large-cap ETFs, AIUP and AINT, claiming the funds will be solely managed by a proprietary AI framework that ranks all S&P 500 stocks and drives portfolio selection, weighting and rebalancing. The company says humans will only provide oversight and governance. The ETFs are said to be the first of their kind approved by the SEC. Industry observers warn that earlier AI-driven or heavily automated stock-selection funds have faced operational and performance challenges, including extreme turnover.