Why this ETF fund is reducing its allocation of Nvidia

Qraft Technologies has decreased its allocation of Nvidia (NVDA) in its AI-enhanced US large-cap ETF (QRFT) from over 6% in May to just 0.7% in June. Qraft Technologies head of AI ETFs Weldon Rice joins Catalysts to discuss the reasons behind the move.

Rice reiterates that Qraft is an AI investment technology company that uses AI to select stocks in its portfolios and changes its holdings every month. "What we've seen over the years with our ETFs, which are now over five years old, is that they tend to sometimes want to take profits in some of these stocks. And Nvidia is one that has had an unbelievable year to date and had a great May. So we feel that the AI model was thinking that it's a great time to take profits," he explains.

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This post was written by Melanie Riehl

Video Transcript

Volatile week for in video here, but that has not derailed the overall market rally too much crafts A I enhanced us large cap ETF that's under ticker symbol.

QR FT has decreased its allocation and video from over 6% in the month of May.

Now down to just 0.7% in June.

Joining us now to discuss this, we Weldon Rice.

He is craft technologies, head of A I ETF Weldon, great to speak with you.

Thanks for coming on the show.

I mean, let's start with exactly that right, decreasing your NVIDIA allocations by that much is a curious move given the overall market rally that we've seen, I mean, a third of the S and PS rally has been attributed to just NVIDIA alone.

What's the justification?

Sure.

Uh Thank you for having me on and uh yeah, just to uh you know, for the viewers out there that may not know who we are.

We are A I investment technology company and, and for QR FT and all three of our ETF S that we have, we use artificial intelligence to actually select the stocks in the portfolio.

And so yeah, uh this last rebalance, uh that we had, uh, we, we, we changed the holdings every month and, uh, NVIDIA, you know, suddenly dropped out from the, you know, it was one of the top holdings in the previous month dropped down from 6% all the way down to, you know, just below 1% in the portfolio.

And, uh, you know, what we've seen over the years with our ETF S which are now over five years old is that, uh they tend to, you know, sometimes want to take profits uh in some of these stocks.

And, you know, NVIDIA is one that has, you know, had an unbelievable year uh to date and had a great may.

So, uh you know, we, we feel that the, the A I model was thinking that it is a great time to take profits.

Um you know, so in, despite, uh, you know, not having NVIDIA in the top holding, uh you know, it's put up about 5.3% this month uh in terms of performance, which is outperforming the S and P so you can dock it down as one of the few funds probably out there outperforming the SNP with, you know, without NVIDIA.

Uh So I think that's quite interesting.