DIP is a long-only (meaning, it is not betting that its holdings will decline in value, rather that they will rise) equity ETF that trades on the New York Stock Exchange. DIP offers investors the opportunity to capitalize on short-term market dip events of large-cap U.S. stocks (i.e., those of companies with market capitalization values of more than $10 billion). DIP uses proprietary artificial intelligence (AI) technology to identify true dips and perform what is commonly known as a “buy the dip” trading strategy.
A market dip event is defined as a short-term oversell in an otherwise uptrending stock (meaning, enough shares of the stock have been sold in a short period that it depresses the price, despite not correlating to the stock’s actual value). As a consequence, the selloff temporarily reduces the stock’s value. The event is then followed by a buying rally that reverts the price to its original level, or higher.
“Buy the dip” is a long-only trading strategy (meaning, it is not betting that its holdings will decline in value, rather that they will rise) that seeks to buy a stock at the bottom of the selling trend in a dip event and sell the same stock at the end of the buying rally. When done successfully, a profit is realized from the stock’s bottom-to-top movement.
In the course of a trading day, the AI system driving DIP gathers data from multiple proprietary indicators for more than 1,000 US stocks. DIP’s AI analyzes this data and generates buy signals for stocks it determines are at the bottom of a dip and sell signals for those it determines have recovered some of their value.
DIP is designed to hold between 20 and 40 stocks at a time.
If DIP’s AI determines that fewer than 20 stocks are identifiably in a dip at a given time, it will automatically direct allocation of excess capital to a bespoke portfolio of four index-based ETFs. The specific weightings of each ETF in this portfolio varies according to DIP’s AI-based predictions and risk management. This mechanism allows the investment strategy to remain long-only (meaning, it is not betting that its holdings will decline in value, rather that they will rise), to seek to diversify risk as required by the Investment Company Act of 1940, and to allocate all capital.