Ai Funds launched its first ETF, the Ai Funds High Conviction US Equity AI-Managed ETF (BATS:HIAI), introducing its proprietary BAILA AI investment model to the ETF market.
HIAI will hold roughly 40 to 60 U.S. stocks selected from the 1,000 most liquid U.S. equities. BAILA reviews the portfolio weekly, using more than 30 years of market history, Bayesian probability and portfolio optimization to determine holdings, position sizes and overall market exposure. The strategy can also raise cash when its signals indicate higher risk.
Ai Funds said BAILA has powered investment strategies used by financial advisors since 2019, overseeing hundreds of millions of dollars in assets.
QUICK CONTEXT: AI Moves Into Active ETFs
The launch adds another layer to the rapidly expanding intersection of artificial intelligence and ETFs. While numerous ETFs already target AI-related companies, HIAI takes a different approach by using AI to make portfolio decisions rather than simply investing in companies developing the technology.
The fund is also entering a market where active ETFs have been gaining traction. Active ETFs accounted for roughly 80% of new ETF launches in the first half of 2026, reflecting growing investor demand for strategies that can move beyond traditional index-based exposure.
HIAI’s concentrated portfolio and weekly review process position it closer to an actively managed equity strategy than a conventional broad-market ETF. Its ability to adjust market exposure and move toward cash could also distinguish it from traditional long-only equity funds, although the strategy’s ability to outperform or reduce downside risk remains to be tested in live ETF trading.
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