The Direxion iBillionaire Index ETF (NYSEARCA:IBLN) tracks the iBillionaire Index comprising 30 U.S. large- and midcap securities favored by the likes of Warren Buffett, Carl Icahn and George Soros, as stated in 13F filings.
"It democratizes a lot of the information that very wealthy institutional investors have had for a long time," said Brian Jacobs, president of Direxion Investments.
IBLN will likely compete with the Global X Guru ETF (NYSEARCA:GURU) for assets, as GURU also attempts to mimic equity positions taken by large hedge funds; however, IBLN will feature a cheaper expense ratio of 0.65%, which could help attract investors.
Other ETFs which track the holdings of well known investors: GURX, GURI
The First Trust RBA Quality Income ETF (QINC) and RBA American Industrial Renaissance ETF (AIRR) will track their respective Richard Bernstein Advisors indexes; QINC will focus on total return through global firms with strong dividends and capital appreciation potential, while AIRR will invest in both small and mid-cap domestic firms in the industrial and community banking sectors.
The Global X Guru Small Cap Index ETF (GURX) and Guru International Index ETF (GURI) are hoping to capitalize on the success of GURU by offering exposure to small-cap and international (respectively) stocks that large hedge fund managers hold.
To those who remember the risk on/risk off days of 2011 when the entire universe of assets seemingly moved together based on the utterings of some politician here or across the pond, today is quite a different matter. The instances of days in which more than 90% of S&P 500 stocks move together have all but vanished late last year and this year.
The 65-day average correlation of stocks fell to 0.52% in January vs. an average of 0.63% between 2009 and 2013 (it rose as high as 0.84% late in 2011).
Investors have responded by moving money into so-called actively managed strategies, with those funds seeing inflows of $1.3B this year on top of $9.8B in 2013. It's a small amount, but contrasts with $360B pulled out of such funds between 2009-2012.
The Global X Top Guru Holdings ETF (GURU) turns 1 year old today, having gained 35.8% since inception, outpacing the S&P 500 by more than 1K basis points. It's not bad considering the criticism leveled at the fund for its stock picks relying on data several weeks old (it selects stocks based on hedge funds' 13F disclosures). Part of the fund's secret coud be equal-weighting - the largest current holding makes up just 2.29% of assets, while the smallest accounts for 1.64%.
AUM at the year-old Global X Top Guru Holdings ETF (GURU) are up more than 1,000% YTD as its strong performance (up more than 40% since inception vs. about 30% for the SPY) lures investors. The fund invests by studying 13F filings and rebalances quarterly. Other funds based on hedge fund positions - ALFA and QAI - are also trailing GURU.
ProShares lowered fees yesterday on its Credit Suisse 130/30 ETF (CSM) to 0.45% from an earlier 0.95%. ProShares is the first to cut fees for ETFs in this class, where investors are looking to outperform large-cap indexes. The fund's also getting a truer name (ProShares Large Cap Core Plus), but no change to holdings and strategy. Competitors: JFT, HDG, ALFA, GURU
The Global X Guru Index ETF seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Guru Index.
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