MONEY ETFs

Invest Like Warren Buffett—Or at Least Like He Did Two Months Ago

A new ETF seeks to mimic the best ideas of billionaires like Warren Buffett and Carl Icahn based on their public holdings. Trouble is, the fund can't copy them in real time.

Mom-and-pop investors hoping to emulate the investment savvy of Wall Street’s wealthiest like Warren Buffett and Carl Icahn will have a new option on Friday when the latest low-cost exchange-traded fund tracking the stock picks of big-name investors begins trading.

The Direxion iBillionaire ETF, set to trade under the ticker “IBLN,” is the latest in a handful of similar ETFs that have come to market in recent years, all packaging the holdings disclosed quarterly by top investment managers into instruments that are more accessible to Main Street investors.

“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, the ETF provider that has partnered with index creator iBillionaire.

At $65 for every $10,000 invested, fees for the new iBillionaire ETF are far lower than the $200 that would be charged by the typical billionaire-run hedge fund, which would also tack on performance fees.

To be sure, the iBillionaire ETF, like the similar Global X Guru ETF launched in 2012, focuses only on the long portion of these billionaire portfolios and does not include day-to-day active management or any shorting of stocks. Furthermore, the practicalities of pulling investment ideas from the quarterly reports filed by these large investors means that the investment ideas often lag by at least 45 days.

The new ETF is based on an index created in November by startup firm iBillionaire. The fund and its underlying index include the 30 top U.S. companies in which a pool of selected billionaire investors have invested the most assets, based on the so-called 13F disclosures the investors must file quarterly with the U.S. Securities and Exchange commission. Top holdings in the index right now include Apple, Micron Technology and Priceline, with about a third of its portfolio in technology stocks.

“Billionaires are more bullish on technology” right now, said Raul Moreno, chief executive officer and co-founder of iBillionaire. “You can see that by their allocation and their strategies.”

The ETF is similar to the GURU ETF and AlphaClone Alternative Alpha ETF, which both launched in 2012. While they had both beat the benchmark S&P 500 index with stellar performances in 2013, they have been more lackluster this year, with GURU up 0.6 percent and ALFA up 0.3%, compared to the S&P 500, up 4.5% through Thursday’s close.

So far, these funds have a niche following – The GURU ETF has amassed about $499 million in assets, while the ALFA ETF has amassed $79 million in assets. So the billionaires being copied need not worry about losing clients to them, said Ben Johnson, an analyst with research firm Morningstar.

For a related story, see:

Inside Warren Buffett’s Brain

TIME Billionaires

The World’s Youngest Billionaire is Just 24 and She’s From Hong Kong

HONG KONG-CHINA-MILITARY-DEFENCE
The fabled Hong Kong skyline. The city is home to 45 billionaires, including the world's youngest PHILIPPE LOPEZ—AFP/Getty Images

Perenna Kei is described as "secretive," which is probably a very sensible thing for a young person in her position

There’s a new kid in town on Forbes magazine’s annual ranking of the world’s billionaires.

24-year-old Perenna Kei Hoi-ting is now the the youngest billionaire in the world, displacing Facebook co-founder Dustin Moskovitz.

The wealthy Hongkonger who is also known by the name Ji Peili studied finance in London, has an estimated net worth of $1.3 billion and holds 85 per cent of Logan Property, of which her father Ji Haipeng is the chairman and chief executive, but little else is known about her.

She is one of 42 new female billionaires on the list and one of 45 billionaires from Hong Kong. Microsoft founder Bill Gates is back at the top of the list and is estimated to be worth $76 billion.

[South China Morning Post]

TIME Wealth

Record Number of Women on Forbes’ Billionaires List

Sheryl Sandberg 'Lean In' Japanese Edition - Press Conference
Jun Sato—WireImage

A record 172 women are worth ten figures, up 25% from last year

Forbes’ annual list of billionaires includes a record 172 women this year, up 25% from last year’s 138 female billionaires.

Facebook chief operating officer Sheryl Sandberg made the list for the first time, and of the 268 newcomers to the list, 42 are women, the highest share of new female billionaires ever.

Other newly minted female billionaires include Folorunsho Alakija, a self-made Nigerian billionaire who made her $2.5 billion in the oil industry, and Denise Coates, who made her $1.6 billion from her online gambling company, Bet365.com. Two of Estee Lauder’s granddaughters also make the list this year, Aerin Lauder Zinterhofer and Jane Lauder, who each oversee other companies now. Zinterhofer runs her own lifestyle empire, Aerin, and Lauder will take the helm at Clinique in April.

Other veteran billionaires like Oprah Winfrey, Hewlett Packard CEO Meg Whitman and Spanx creator Sara Blakely returned to the list this year. The richest woman in the world is Christy Walton, heir to the Wal-Mart empire founded by her father-in-law. She’s the only woman in Forbes’s top 10.

The list numbers a total of 1,645 billionaires worth a combined total of $6.4 trillion, up from $5.4 trillion last year, which means another trillion dollars are in the hands of the planet’s richest people. Women make up a little under 10% of the total billionaire population.

[Forbes]

MONEY

Tell the Billionaires Where to Give

As you’ve probably heard, billions of dollars will be flowing into charitable organizations worldwide in the coming years, thanks to the Giving Pledge, a project spearheaded by Warren Buffett and Bill and Melinda Gates.

Thus far, about 40 U.S. billionaires have agreed to give away at least 50% of their wealth, according to the Giving Pledge. And while the Giving Pledge hasn’t released a tally, Forbes.com estimates that America’s wealthiest will give away an additional $120 billion or more in the years to come.

Considering that the total charitable giving in the U.S. has been hovering at about $300 billion per year for the last few years, according to the Giving USA Foundation, the amount pledged represents an astounding increase. While many billionaires will continue to give to causes they hold dear, perhaps some will be open to suggestions.

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