Artificial intelligence is reshaping the financial industry, and now it’s making its way into the hands of ordinary investors, packaged as an exchange-traded fund (ETF). FINQ, a next-generation fintech firm co-founded by Eldad Tamir and backed by cybersecurity entrepreneur Nir Zuk, has filed for two AI-driven large-cap ETFs with the SEC, in partnership with Tidal Investments LLC, which serves as adviser, while FINQ AI LLC acts as sub-adviser. If greenlit, these products would open a new chapter in retail investing.
AI Joins the ETF Revolution
ETFs have modernized investing, offering transparency, low cost, and liquidity. A PwC survey of global ETF executives indicates that global ETF assets under management (AUM) will reach a minimum of $18 trillion by 2026, and more likely, $20 trillion. The outlook is based on the remarkable inflows of funds to ETFs, the new players entering the market, and the innovative products both in use and envisioned. Meanwhile, AI is poised to be the next catalyst for innovation in finance.
According to the CFA Institute, although only 29% of systemic investors currently use AI to develop and test investment strategies, more than three-quarters anticipate doing so in the future. Invesco Global Systemic Investing Study supports this: 59% of investors now incorporate AI into their investment processes, up from 47% the previous year. This trend, combined with growing interest in AI among investment professionals, signals a tectonic shift toward model-driven investing.
What FINQ Proposes
The company has filed a preliminary prospectus for two actively managed U.S. large-cap exchange-traded funds: FINQ FIRST U.S. Large Cap AI-Managed Equity ETF (proposed ticker: AIUP) and FINQ DOLLAR NEUTRAL U.S. Large Cap AI-Managed Equity ETF (proposed ticker: AINT).
Both ETFs are built on FINQ’s proprietary AI-driven ranking model, which continuously evaluates the relative performance potential of every stock in the S&P 500. AIUP invests only in the top-ranked performers, while AINT uses a long/short structure to hedge against broad market moves. The latter does this while holding the best-ranked stocks and shorting the bottom-ranked.
While FINQ’s AI model drives stock selection, Tidal oversees fund operations, compliance, and regulatory responsibilities as adviser.
This systematic approach seeks to bring advanced models, normally reserved for institutional investors, into a transparent public fund structure.
Democratizing AI-Driven Investing
FINQ’s approach is about applying AI and making advanced tools accessible in a transparent, rules-based ETF structure. Strategies once limited to hedge funds, like daily equity re-ranking, are now available to everyday investors, empowering them with tools that were previously out of reach.
By embedding AI into mainstream products, FINQ’s ETFs illustrate a broader shift in finance where technology moves from the back office to the forefront of portfolio construction, risk management, and wealth-building. This transformation is not just significant, but also exciting, as it opens up new possibilities for the industry.
AI’s Growing Role and the Need for Oversight
The SEC is already navigating how AI and automated systems may affect markets. Last year, it settled enforcement actions against firms accused of “AI washing” or misleading claims about AI use. Just recently, the SEC created an AI Task Force to explore the responsible deployment of the technology in its own operations.
Meanwhile, the IMF warns that AI-driven trading may increase both efficiency and market volatility, especially during stress periods. As such, FINQ’s ETFs could serve as important early test cases, merging AI-driven investing with regulatory scrutiny.
The Broader Picture
AI-themed investments already exist: broad thematic ETFs capture exposure to chipmakers and software firms powering AI innovation. However, FINQ’s funds go beyond thematic exposure; they embed AI into how stock selections are made. This marks a shift from AI as a theme to AI as an engine for allocation.
If successful, FINQ may set a precedent: mainstream investors accessing funds where decisions are driven not by human judgment, but by AI-calibrated models. That evolution may well define the next wave of active investing, and it’s unfolding at a regulatory crossroads.
Read the original company press release for full disclosure.
