Counterpoint Quantitative Equity ETF

CPAI

Market cap $413M

I initiate coverage of the Counterpoint Quantitative Equity ETF, an actively managed vehicle utilizing AI-driven models in the portfolio creation process, with a Hold rating. CPAI's performance since inception in 2023 has been impressive, as it has trounced IVV, QQQ, IJH, IJR, and AIEQ. However, its risk-adjusted returns have been rather weak owing to high volatility, plus downside capture was at 135.5%.

Counterpoint Quantitative Equity ETF holds 50 stocks selected by adaptive machine learning models. The CPAI ETF has outperformed the S&P MidCap 400 and S&P 500 since inception, showing resilience in the recent market downturn. Moreover, it has outperformed other AI-powered ETFs over the last 12 months, although one of them has a better Sharpe ratio.