Israel-based asset manager FINQ is taking one of the boldest steps yet in the evolution of quantitative investing, launching two U.S.-listed exchange-traded funds whose portfolios are selected and managed entirely by artificial intelligence. The move comes as global investors increasingly question whether human judgment can keep pace with markets shaped by massive data flows, algorithmic trading, and rapidly shifting sentiment.

The ETFs, trading under the tickers AIUP and AINT, focus on U.S. large-cap equities and have received approval from the U.S. Securities and Exchange Commission. According to FINQ, portfolio construction, stock selection, weighting, and rebalancing are all handled autonomously by its proprietary AI system, with human involvement limited strictly to oversight, risk controls, and governance.

A Break From Traditional Active Management

In most of today’s investment landscape, artificial intelligence plays a supporting role. Portfolio managers may use machine learning models to screen stocks, optimize execution, or identify risk patterns, but humans still make the final calls. FINQ’s approach represents a sharp departure from that model. Here, the AI is not advising the manager; it is the manager.

The firm says its system continuously evaluates the entire universe of large-cap U.S. stocks, ranking them dynamically based on a wide range of structured data inputs. Those rankings directly determine which stocks enter or exit the portfolio and how positions are sized over time. The promise is consistency and speed, free from behavioral biases such as fear, overconfidence, or the pressure to react to headlines.

The Behavioral Case for Machines

FINQ founder and CEO Eldad Tamir argues that emotional decision-making is one of the biggest drags on long-term investment performance. In volatile markets, human managers often struggle to balance discipline with adaptability, leading to mistimed trades and excessive turnover. An AI system, by contrast, can process vast datasets continuously and apply rules without hesitation or fatigue.

This pitch resonates at a time when many actively managed equity funds have underperformed their benchmarks, pushing investors toward passive strategies. A fully autonomous AI ETF positions itself as a third path: systematic like an index fund, but adaptive like an active strategy.

A Nascent and Unproven ETF Subsector

Still, the history of AI-driven stock selection is mixed. Previous attempts to deploy artificial intelligence as the primary decision-maker have seen some funds shuttered after failing to attract assets or deliver stable returns. Industry observers note that earlier generations of AI funds often suffered from extreme portfolio turnover, which eroded performance through trading costs.

Morningstar ETF analyst Bryan Armour has cautioned that while AI tools are improving rapidly, success in live markets remains uncertain. The challenge is not only prediction accuracy but also robustness across market regimes, from calm bull markets to periods of sharp stress.

What Investors Should Watch Next

FINQ’s launch puts real capital behind a long-running debate: can machines consistently outperform humans when entrusted with full control? Early performance, volatility management, and turnover will be closely watched by both U.S. and Israeli investors. If the funds demonstrate discipline and resilience, they could accelerate acceptance of fully autonomous strategies. If not, they may reinforce the view that AI works best as a co-pilot rather than the sole driver.