ETF To Replicate The Investing Ideas Of Billionaire Investors

Who doesn’t dream of becoming an iconic investor like Warren Buffett, Carl Icahn, Daniel Loeb, David Tepper or David Einhorn? Keeping investors’ aspirations in mind, Direxion has released an ETF in partnership with iBillionaire that seeks to replicate the investing ideas of billionaire investors.

There is no doubt that innovation has taken charge of the ETF industry lately. Be it socially conscious funds, forensic accounting funds or an investment in the Women in Leadership index, issuers are broadening their views and employing unusual strategies while launching new products.

The new Direxion ETF – the Direxion iBillionaire Index ETF (NYSEARCA:IBLN) – hit the market on August 1, 2014 (read: Bet on This Top-Ranked Large-Cap Growth ETF).

IBLN in Focus

The ETF looks to track the iBillionaire Index. This benchmark intends to reflect the performance of 30 U.S. large-cap stocks. The index uses a set of criteria to select its desired billionaire investor from a list of 10.

Information regarding the billionaire’s holdings is selected from Form 13F filings. All 30 stocks that the index zeroes in on are nothing but the ones where those billionaire investors invest their money the most.

Some of the top companies in this index include Apple (AAPL), Micron Technology (MU), Priceline Com Inc (PCLN), 21st Century Fox (FOXA) and Dollar Gen Corp. (DG). The top 10 holdings account for about 33.3% of total assets. The index follows an equal-weighted approach and does not carry company-specific concentration risk.

The index is dominated by the Technology sector which accounts for roughly 33% of assets. Consumer discretionary and energy take the next two positions at around 17% of exposure. Financials also get double-digit allocation of 10% at the index.

This novel exposure is not very expensive either, as the fund looks to charge investors 65 basis points a year in fees. Investors should note that the return of the index outperformed the S&P 500 this year.

How Does it Fit in a Portfolio?

This ETF is built for investors who are seeking above-average market returns irrespective of broader market conditions. With the U.S. economy gaining steam and the technology sector turning around after a prolonged downturn, investors may very well want to make the most of this resurgence.