This ETF run by a robot is beating the market--here's how it works

Artificial intelligence and machine learning (see: robots) are slowly seeping into every industry in the market, from manufacturing to health care to agriculture by way of tomato picking. A.I. has even taken hold in the world of investing, with Morgan Stanley using deep learning to test and fine tune its analysts' investment strategies. "It's powered by IBM Watson, " EquBot co-founder and chief operating officer Art Amador tells CNBC's "ETF Edge." "The idea is to recognize patterns across management teams, across financial statements, across news [and] things like social media, to identify trends that are occurring in the marketplace and to capture the companies that are going to appreciate the most over the next six to 12 months," he said. The function is similar to what Morgan Stanley is using to bolster its analysts' calls. The machine behind the ETF reads through over 1 million pieces of data per day including SEC filings, earnings reports, news stories and social media posts to determine which stocks it thinks are heading higher, Amador said.