USA
Jim Rogers lists a country strategy ETF of ETFs, helped by AI
Defying his own warnings of a pending bear market, finance legend Jim Rogers is listing a country strategy ETF of ETFs that uses AI to time the market. The Global Macro ETF (BIKR) will invest in plain vanilla single-country ETFs that track the major indexes of rich countries. It will use an “artificial intelligence-driven algorithm” to determine how much to invest in which countries and when.
When making investment decisions, the algorithm will look at macro data – including volatility, interest rates, productivity, gross national product – every month “to identify likely changes in market directions in individual countries and within the global economy,” the prospectus says. When it judges that time is ripe to reduce or remove exposure to a single country, BIKR can switch some or all of its assets into 1 – 3-year US Treasury ETFs.
BIKR is listed by white-labeler ETF Managers Group, while the index is maintained and the fund advised by Ocean Capital Advisors, a company chaired by Mr Rogers.
Analysis – will it beat a global ETF?
With so much talk of “borderless economies”, “free trade”, “free markets” these days, investors can sometimes forget that capital still has national roots. Stock markets exist in legal contexts set by states. Economic growth is shaped by tax and spend policies set by states. Transactions are settled in currencies backed by states. And when it ultimately hits the fan, companies and markets are bailed out by states and their central banks. Country-specific investment strategies recognize this, and perhaps that’s a good thing.
Yet country strategies can be difficult. For instance, how does one tell that this country will be the next South Korea, while that country will be the next Zimbabwe? And how does one tell when a Donald Trump is going to win the next election? Some avoid the political and market timing questions and just buy a global ETF. Others, like the advisers of this product, try answering it. Reading the prospectus, it’s a great shame that it doesn’t reveal more about how countries will be chosen (if only because we’d like to know for our own investments). But it will be interesting to benchmark this fund’s performance to plain vanilla global ETFs.
It’s a great strength of ETFs that they make international investing easy. And as every investment rookie knows, diversifying internationally is as important as diversifying across asset classes. We don’t know if Jim Rogers knows how to time the global market or if his grasp of international politics is any better than ours. But this ETF will be one to watch.
Other news:
Arkera, an ETF fintech
There is interesting new fintech company focussed on helping self-directed investors be better informed about investing in ETFs. Called Arkera, they’ve launched a free to use IoS mobile app in both the US and UK app stores. Arkera’s engine was built by a team of financial experts and experienced technologists. It provides users access to daily curated investment ideas matched to ETFs as well as an AI-powered news feed on companies and financial influencers. Free IOS download.