DIP’s AI is a collective of computational systems based on state-of-the-art machine learning techniques, which leverages ongoing and emerging peer-reviewed research from academia and the financial industry. Each of these systems is trained on more than 15 years of intra-day market data and contributes to the generation of the entry and exit signals for potentially lucrative opportunities while simultaneously determining how to control and mitigate risk.
Simply put, the DIP’s AI is designed to recognize and flag behaviors or anomalies in intra-day trading patterns that it has determined typically precede dip events.
DIP trades large-cap stocks (i.e., those of companies with market capitalisation values of more than $10 billion) listed on the NYSE and Nasdaq. DIP also trades a weighted blend of four index-based ETFs.
Yes, DIP is a fully transparent, actively managed ETF.
Scientific investing is a form of active investing informed by data science including advanced data analysis. For DIP, the goal of its artificial intelligence-based system is to leverage machine learning to identify quantitative patterns in the market that lead to trade entry signals, followed by their exit signals, and to maintain full investment across the universe of securities analyzed.
Buying the DIP (AKA, BTD) involves buying a temporarily undervalued stock and selling it after it rebounds. For most investors, it is nearly impossible to consistently identify true dips. But the collective AI managing DIP applies a proprietary set of indicators to evaluate potential dips, with the goal of optimizing a “buy the dip” strategy.
DIP’s investment strategy is designed to operate efficiently in all market conditions. DIP’s AI does this by searching for needles in the haystack: its goal is to identify and capitalize on short-term buying opportunities, and then sell once the equity regains its value. Though the number and size of these opportunities may change with market conditions, the underlying active trading strategy is designed to perform in aggregate whether the market as a whole is up or down. While there may be fewer opportunities in a downturn, DIP’s AI was built with the goal of finding true dips in individual stocks, which can occur regardless of the overall market performance.
Although DIP is classified as a long-only equity strategy (meaning, it is not betting that its holdings will decline in value, rather that they will rise), it is very different from most long-only funds. In large part, DIP’s administrative expense fees pay for the significant investment in technology necessary to power DIP’s AI — hundreds of thousands of dollars annually in hardware, software, and maintenance. Most long-only funds rely on humans to select the stocks to invest in and so have no such investment costs, enabling them to be able to have lower expense ratios.