The intersection of artificial intelligence and investing is moving beyond the realm of back-office tools and algorithmic trading desks. FINQ AI LLC, a next-generation fintech company founded by Eldad Tamir and backed by Palo Alto Networks founder Nir Zuk, has filed a preliminary prospectus for two actively managed U.S. large-cap exchange-traded funds (ETFs). Both are advised by Tidal Investments LLC and sub-advised by FINQ, designed to bring institutional-grade AI strategies to everyday investors.
The proposed funds are the FINQ FIRST U.S. Large Cap AI-Managed Equity ETF (proposed ticker: AIUP) and the FINQ DOLLAR NEUTRAL U.S. Large Cap AI-Managed Equity ETF (proposed ticker: AINT). They represent a new front in the race to integrate AI into mainstream asset management. The funds are expected to be listed on a national securities exchange following the effectiveness of the registration statement and subject to applicable approvals.
A Systematic Approach to Large Cap Investing
Unlike traditional funds that rely on human portfolio managers, the ETFs apply a systematic approach based on the firm’s proprietary AI model. The model generates a daily relative ranking of every stock in the S&P 500 Index.
The strategy then splits into two approaches:
- AIUP (FINQ FIRST) takes long positions in the top-ranked stocks.
- AINT (FINQ DOLLAR NEUTRAL) uses a long/short structure, pairing long positions in highly ranked names with short positions in the lowest-ranked. This strategy is designed to reduce exposure to market direction.
“Our goal is to bring advanced AI capabilities to investors in a transparent, rules-based structure,” said Eldad Tamir, FINQ’s founder and CEO, in the filing announcement. “These ETFs are designed to challenge conventional thinking by using technology to remove noise and uncover relative performance insights on a continuous basis.”
AI Meets Accessibility
The push to democratize sophisticated investment strategies is central to FINQ’s positioning. Until now, many AI-driven approaches, such as daily re-ranking of equities and relative-value insights, have largely been the domain of hedge funds and institutional investors.
FINQ aims to change that dynamic by embedding these tools into a publicly listed ETF wrapper, leveraging Tidal’s experience in fund operations and compliance to offer accessibility, liquidity, and cost transparency. It’s an approach that echoes a broader industry trend: using technology to narrow the gap between Wall Street’s most advanced capabilities and what retail investors can access in their brokerage accounts.
A Market Hungry for Innovation
ETFs have long been a laboratory for innovation in finance. According to BlackRock’s data, active ETF assets reached $900 billion through the first half of 2024, with about $693 billion in the U.S. alone. AI is also increasingly seen as the next competitive differentiator.
Moreover, Boston Consulting Group describes AI as a key enabler across three strategic priorities, particularly productivity, personalization, and private markets, in asset management. In fact, Northern Trust reports that 91% of fund managers are using or are planning to use AI, as they seek the next differentiator in a highly competitive space.
FINQ’s offering enters a time when investors are grappling with both the promise and pitfalls of AI in financial markets. Models can rapidly process massive amounts of data, detect patterns missed by humans, and react in real time. Yet, they are also vulnerable to flaws in data quality, hidden biases, and the classic “black box” problem of explainability.
By offering rules-based transparency around how its models allocate capital, FINQ is signaling that AI need not remain a mysterious force behind the curtain. Instead, it can be operationalized in a way that investors can monitor and evaluate.
Risk and Reward
As with any innovation in finance, risks remain. The prospectus notes that the funds could face high portfolio turnover, driving up trading costs, as well as model and data risk, where outcomes depend heavily on the accuracy of proprietary algorithms. The non-diversified nature of the ETFs could also amplify exposure to individual names compared to broader index funds.
The Bigger Picture
For investors, the question is less about whether AI belongs in asset management, because it already does, and more about whether AI-driven ETFs can deliver the transparency, performance, and trust needed to win over the mainstream market.
By putting AI at the center of two distinct ETF strategies, with FINQ managing investments and Tidal providing oversight, the partnership is betting that the next wave of investor demand won’t just be about owning technology stocks, but also about owning technology-powered funds.
If successful, FINQ’s approach could mark an early blueprint for how AI transitions from being a back-end engine to becoming the driver of financial products accessible to anyone with a brokerage account.
Read the original company press release for full disclosure.
