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This Robot Trader Turned Bullish on Amazon, Facebook, and Nvidia. What It Sold. | Barron’s

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An exchange-traded fund with holdings decided by artificial intelligence loaded up on shares of

Amazon,


Facebook,

and

Nvidia

this month, as the robot trader turned bullish on technology and U.S. retail—and doubted some Covid-19 pandemic trend stocks.

In a departure from recent months, the robot trader went all-in with its new picks, which now represent the five largest holdings in the fund. Amazon has a portfolio weighting of 7.98%, followed close behind by Facebook with 7.91%. Nvidia makes up 6.06% of the fund with

Walmart

and Home Depot at 4.83% and 4.24%, respectively. 

The remaining stocks in the fund’s top 10, making up between 3.96% and 1.9% of AMOM, are software groups

Adobe

(ADBE) and

Intuit

(INTU), semiconductor companies

Texas Instruments

(TXM) and

Lam Research

(LRCX), and beauty products powerhouse

Estée Lauder

(EL).

Facebook and Nvidia’s respective pushes into the metaverse make them attractive investments, said Francis Geeseok Oh, a managing director at Qraft and the head of its Asia-Pacific business. 

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The metaverse is a buzzword referring to virtual environments in which users can immerse themselves—whether that be to interact and work with others, consume content, or more. As Barron’s wrote last month, “it’s like being inside the internet, versus just connecting to it.”

Facebook CEO Mark Zuckerberg has said the company’s future is in the metaverse—and it recently rolled out virtual workspaces in Facebook Workrooms. Nvidia, similarly, has developed what it calls the Omniverse—a real-time, 3-D computer simulation and collaboration platform with industrial applications such as simulating factories.

Also read: The Metaverse Goes Beyond Facebook. Watch These Stocks.

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As for Amazon, AMOM’s recent buy only brings the tech giant back into the fold after a hiatus. “AMOM removed Amazon last month before it missed Q2 earnings expectations,” Oh noted, saying that its addition in September represents the advantages of an active strategy. 

Oh also said that the robot trader’s picks—namely, Walmart and Home Depot—emphasize a retail boom in the U.S. The latest retail sales data, from July, showed that sales have slowed, but there remains a convincing case for investors to remain optimistic about American consumers.

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The additions in September came as the artificial intelligence behind AMOM removed chip maker

AMD

(AMD), social media group

Snap

(SNAP), video communications company

Zoom

(ZM), digital scanning and orthodontics specialist

Align

(ALGN), and connected television maker

Roku

(ROKU). AMD, Snap, Zoom, and Align previously made up AMOM’s top-four holdings.

Oh noted that the AI’s decision to remove AMD was likely a profit-taking trade. The stock is up almost 17% so far this year.

But it’s a different story for Zoom and Roku, Oh said, highlighting that the robot trader turned its back on two stocks that represent the “pandemic trade”—businesses that have benefited from trends accelerated by the Covid-19 pandemic.

“This may be a response to the Delta [coronavirus] variant and the increasing belief amongst many analysts that it has reached its peak,” Oh said.

Plus: Jeff Bezos Isn’t the World’s Richest Person Anymore. Meet the Man Who Beat Him.

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AMOM has been listed in New York since May 2019, and has delivered total returns of 15.5% so far in 2021 and 32% in the past year—outpacing its benchmark, the S&P 500 Momentum index, which has climbed a comparable 30% in the past year.

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AMOM is an actively managed portfolio driven by artificial intelligence, tracking 50 large-cap U.S. stocks and reweighting its holdings each month. It is based on a momentum strategy, with the AI behind its stock picks capitalizing on the movements of existing market trends to inform the decision to add, remove, or reweight holdings. The artificial intelligence scans the market and uses its predictive power to analyze a wide set of patterns that show stock-market momentum.

The fund is a product of Qraft, a Seoul, South Korea-based fintech group leveraging AI across its investment products, which include three other AI-picked versions of major indexes: a U.S. large cap index (

QRFT

); a U.S. large cap dividend index (

HDIV

); and a U.S. value index (

NVQ

).

The entrance of AI-run funds onto Wall Street promised a new high-tech future for investing, though it hasn’t quite lived up to the hype yet. Theoretically, researchers have shown that AI investing strategies can beat the market by up to 40% on an annualized basis, when tested against historical data.

But Vasant Dhar, a professor at New York University’s Stern School of Business and the founder of machine-learning-based hedge fund SCT Capital Management, argued on MarketWatch in June 2020 that AI-run funds won’t “crack” the code of the stock market.

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Advocating caution, Dhar said that it was difficult for funds underpinned by machine learning to maintain a sustainable edge over markets, which have “a nonstationary and adversarial nature.” He advised investors considering an AI system to ask tough questions, including how likely it is that the AI’s “edge” will persist into the future, and what the inherent uncertainties and range of performance outcomes for the fund are.

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Write to Jack Denton at jack.denton@dowjones.com

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Updating Special Ad Audiences for housing, employment, and credit advertisers

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On June 21, 2022 we announced an important settlement with the US Department of Housing and Urban Development (HUD) that will change the way we deliver housing ads to people residing in the US. Specifically, we are building into our ads system a method designed to make sure the audience that ends up seeing a housing ad more closely reflects the eligible targeted audience for that ad.

As part of this agreement, we will also be sunsetting Special Ad Audiences, a tool that lets advertisers expand their audiences for ad sets related to housing. We are choosing to sunset this for employment and credit ads as well. In 2019, in addition to eliminating certain targeting options for housing, employment and credit ads, we introduced Special Ad Audiences as an alternative to Lookalike Audiences. But the field of fairness in machine learning is a dynamic and evolving one, and Special Ad Audiences was an early way to address concerns. Now, our focus will move to new approaches to improve fairness, including the method previously announced.

What’s happening: We’re removing the ability to create Special Ad Audiences via Ads Manager beginning on August 25, 2022.

Beginning October 12th, 2022, we will pause any remaining ad sets that contain Special Ad Audiences. These ad sets may be restarted once advertisers have removed any and all Special Ad Audiences from those ad sets. We are providing a two month window between preventing new Special Ad Audiences and pausing existing Special Ad Audiences to enable advertisers the time to adjust budgets and strategies as needed.

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For more details, please visit our Newsroom post.

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Impact to Advertisers using Marketing API on September 13, 2022

For advertisers and partners using the API listed below, the blocking of new Special Ad Audience creation will present a breaking change on all versions. Beginning August 15, 2022, developers can start to implement the code changes, and will have until September 13, 2022, when the non-versioning change occurs and prior values are deprecated. Refer below to the list of impacted endpoints related to this deprecation:

For reading audience:

  • endpoint gr:get:AdAccount/customaudiences
  • field operation_status

For adset creation:

  • endpoint gr:post:AdAccount/adsets
  • field subtype

For adset editing:

  • endpoint gr:post:AdCampaign
  • field subtype

For custom audience creation:

  • endpoint gr:post:AdAccount/customaudiences
  • field subtype

For custom audience editing:

  • endpoint gr:post:CustomAudience

Please refer to the developer documentation for further details to support code implementation.

First seen at developers.facebook.com

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Introducing an Update to the Data Protection Assessment

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Over the coming year, some apps with access to certain types of user data on our platforms will be required to complete the annual Data Protection Assessment. We have made a number of improvements to this process since our launch last year, when we introduced our first iteration of the assessment.

The updated Data Protection Assessment will include a new developer experience that is enhanced through streamlined communications, direct support, and clear status updates. Today, we’re sharing what you can expect from these new updates and how you can best prepare for completing this important privacy requirement if your app is within scope.

If your app is in scope for the Data Protection Assessment, and you’re an app admin, you’ll receive an email and a message in your app’s Alert Inbox when it’s time to complete the annual assessment. You and your team of experts will then have 60 calendar days to complete the assessment. We’ve built a new platform that enhances the user experience of completing the Data Protection Assessment. These updates to the platform are based on learnings over the past year from our partnership with the developer community. When completing the assessment, you can expect:

  • Streamlined communication: All communications and required actions will be through the My Apps page. You’ll be notified of pending communications requiring your response via your Alerts Inbox, email, and notifications in the My Apps page.

    Note: Other programs may still communicate with you through the App Contact Email.

  • Available support: Ability to engage with Meta teams via the Support tool to seek clarification on the questions within the Data Protection Assessment prior to submission and help with any requests for more info, or to resolve violations.

    Note: To access this feature, you will need to add the app and app admins to your Business Manager. Please refer to those links for step-by-step guides.

  • Clear status updates: Easy to understand status and timeline indicators throughout the process in the App Dashboard, App Settings, and My Apps page.
  • Straightforward reviewer follow-ups: Streamlined experience for any follow-ups from our reviewers, all via developers.facebook.com.

We’ve included a brief video that provides a walkthrough of the experience you’ll have with the Data Protection Assessment:

Something Went Wrong

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We’re having trouble playing this video.

The Data Protection Assessment elevates the importance of data security and helps gain the trust of the billions of people who use our products and services around the world. That’s why we are committed to providing a seamless experience for our partners as you complete this important privacy requirement.

Here is what you can do now to prepare for the assessment:

  1. Make sure you are reachable: Update your developer or business account contact email and notification settings.
  2. Review the questions in the Data Protection Assessment and engage with your teams on how best to answer these questions. You may have to enlist the help of your legal and information security points of contact to answer some parts of the assessment.
  3. Review Meta Platform Terms and our Developer Policies.

We know that when people choose to share their data, we’re able to work with the developer community to safely deliver rich and relevant experiences that create value for people and businesses. It’s a privilege we share when people grant us access to their data, and it’s imperative that we protect that data in order to maintain and build upon their trust. This is why the Data Protection Assessment focuses on data use, data sharing and data security.

Data privacy is challenging and complex, and we’re dedicated to continuously improving the processes to safeguard user privacy on our platform. Thank you for partnering with us as we continue to build a safer, more sustainable platform.

First seen at developers.facebook.com

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Resources for Completing App Store Data Practice Questionnaires for Apps That Include the Facebook or Audience Network SDK

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Resources for Completing App Store Data Practice Questionnaires for Apps That Include the Facebook or Audience Network SDK

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