CFD and forex broker eToro has partnered with Bridgewise, a generative AI company for stock analysis, to launch ‘Fundamental-AI’, a portfolio that offers eToro users exposure to companies set to outperform their industry peers. Bridgewise also provides AI-driven equities analysis to The Armchair Trader’s Data+ subscribers.
Employing its proprietary generative AI technology, Bridgewise will analyse the 1,000 biggest companies on eToro by market cap and rank them based on future performance predictors including quarterly filings, earnings calls and analyst research.
As a result of this analysis, each company is assigned a numerical score that reflects the stock’s likelihood to outperform its industry peers. The most promising stocks will be allocated to the portfolio.
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Fundamental analysis at scale
Fundamental-AI is a new addition to eToro’s existing offering of AI-themed portfolios and the first to implement fundamental analysis at scale. The portfolio will be composed of 40 stocks across various industries and geographies, and it will be rebalanced on a monthly basis. All assets are offered as CFDs consisting of long and short positions.
“Fundamental analysis serves as the cornerstone of stock evaluation and has traditionally been time-consuming for individual investors. However, AI changes the game as it can quickly handle vast amounts of data from anywhere in the world, in any language,” explained Dani Brinker, Head of Investment Portfolios at eToro.
By providing its users with a portfolio that embraces both short and long positions, eToro says it is aiming to offer an investment approach that provides the flexibility to adapt to changing market conditions and potentially generate returns regardless of whether prices are rising or falling.
Analysing data with AI has the potential to offer more diversified opportunities to traditional stock picking.
“We are excited to put our proprietary technology to use and give eToro access to machine learning models to help process enormous amounts of market information,” said Gaby Diamant, CEO and co-founder of Bridgewise. “Partnering with eToro, we are excited to be at the forefront of helping investors of all levels to benefit from this innovative, game-changing technology.”
eToro’s Smart Portfolios offer investors exposure to various market themes. Bundling together several assets under a defined methodology, and employing a passive investment approach, they provide long-term investment solutions that offer diversified exposure.
Initial investment starts from USD$500 and investors can access tools and charts to track the portfolio’s performance, while eToro’s social feed will keep them up-to-date on developments in the sector. Not available to US users.
Armchair Trader readers can access Bridgewise analytics across thousands of UK, Canadian and US stocks via our premium data service.
