Famed Robot-Run ETF Says This Is Why It Now Has Tesla As Its Top Holding

The Qraft AI-Enhanced U.S. Large Cap Momentum ETF AMOM, an exchange-traded fund driven by artificial intelligence that acquired a new stake in Tesla Inc. TSLA earlier this month, has revealed why it now has the electric vehicle maker as its top holding.

What Happened: The ETF said in its monthly portfolio update for December that the Elon Musk-led company is currently its largest holding with a 7.7% weighting. The Tesla stake acquisition comes after the fund booked profits in the company earlier.

The fund noted that Tesla’s latest third-quarter results saw the company set records in terms of both revenue and net income.

In addition, the EV maker was able to weather the global semiconductor shortage crisis and even increase deliveries by rewriting software to be more flexible on the type of semiconductor used, the fund said.

Other Large Holdings: The fund currently has streaming giant Netflix Inc. NFLX and biotechnology firm Merck & Co. Inc. MRK as its next two largest investments, with weighting of 6.8% and 5.1% respectively.

Netflix continues to beat all other video streaming competitors in terms of subscription growth and ARPU (Average Revenue Per Unit), as per the fund.

Merck, which submitted its oral COVID-19 drug molnupiravir for emergency use authorization by the FDA in October, is expected to benefit from the rise of variants such as Omicron and the decaying rate of vaccine efficacy, the fund noted.

Why It Matters: AMOM, a product of South Korea-based fintech group Qraft, tracks 50 large-cap U.S. stocks and reweighs its holdings each month. The ETF has assets under management of $27.26 million.

AMOM has delivered year-to-date returns of 9.75%, compared to its benchmark — the Invesco S&P 500 Momentum ETF SPMO – which has returned 21.68% so far this year.

Price Action: AMOM closed 1.8% lower in Tuesday’s regular trading session at $34.57 and further lost almost 0.7% in the after-hours session to $34.34.

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