Direxion, the WI-based manager better known for its suite of leveraged and inverse exchanged-traded funds, launched a new fund that allows the ordinary investor to invest like billionaires. The Direxion iBillionaire Index ETF (IBLN) is similar to the Global X Guru ETF (GURU), but holds a smaller basket.
The new fund tracks the iBillionaire Index, a proprietary equity benchmark launched in November 2013 that aims to outperform the S&P 500 index. IBLN runs a equally-weighted portfolio of 30 of the large-cap (market cap greater than $1 billion) S&P 500 stocks that are most favored by a pool of up to 10 billionaire investors, as disclosed by their most recent 13F filings with the SEC.
Institutional investment managers that have discretion over assets in excess of $100 million are required to file the 13F report, detailing their quarterly holdings. All billionaires in the pool are selected based on personal net worth, source of wealth, portfolio concentration and performance over time.
Also, the billionaire investors must demonstrate long-term investment strategies and log less than 50 percent portfolio turnover rate. The billionaire money managers that the fund screens include, among others, Warren Buffet, Carl Icahn, Ed Lampert, George Soros, David Tepper and David Einhorn.
IBLN only seeks exposure in large-cap US equities and can be thought of an S&P 500 ETF that includes 30 companies most favored by hedge fund gurus. The Global X Guru ETF, on the other hand, tracks about 75 hedge funds with mid – and small-cap holdings.
The iBillionaire Index is equally weighted and includes well-known names such as Coca Cola, Microsoft, Apple, Twentieth Century Fox, eBay, Google and FedEx. The index is tilted toward technology with 33.33 percent allocation, followed by consumer discretionary and energy. The index has returned 16 percent since its inception last year compared to about 12 percent for the S&P 500.
IBLN has a net expense ratio of 0.65 percent.
Disclosure: No holdings
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