For a number of reasons, most investors will never put their
money into a hedge fund. While this decision may be good or bad,
based on the performance of the specific hedge fun, a large
portion of hedge funds consistently beat the overall market
The goal of the Global X Guru ETF (NYSE:
) is to aggregate on a quarterly basis the ideas and knowledge of
the hedge fund managers into portfolio of individual stocks. By
using a proprietary methodology, the Solactive Guru Index, which
GURU tracks, compiles the highest conviction stocks held by hedge
funds with over $100 million in assets under management. Each
quarter the portfolio is rebalanced to reflect any changes made
by the hedge fund managers.
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Since the beginning of this year GURU is up 42 percent versus
a gain of 26 percent for the S&P 500. Since it's inception in
early June 2012, the ETF is up 70.5 percent versus a return of
43.9 percent for the S&P 500. For an investor that put
$10,000 into the ETF it is a difference of $2,660.
The current top holding for the ETF, which only accounts for
2.1 percent, is Sprint Corp (NYSE:
). There are a total of approximately 50 stocks in the portfolio.
Versus the S&P 500 the ETF is overweight the materials,
consumer discretionary, industrials, and telecom sectors. The
sectors the ETF are most underweight versus the index are the
consumer staples and utilities. The ETF is clearly leaning
towards the more cyclical and economically sensitive sectors,
which tend to do well during a strong bull market.
The ETF performed its quarterly rebalance of positions on
11/21/13 and it sold 15 positions and added 14 new stocks.
Noteworthy sells included Google (NASDAQ:
), Microsoft (NASDAQ:
), and Intel (NASDAQ:
). Stocks that were added to the ETF included Proctor &
), Family Dollar (NYSE:
),and Hess Corp (NYSE:
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With the current portfolio allocation leaning towards the more
aggressive side, GURU should continue to outperform this quarter
as long as the bull market stays intact. Any sharp pullbacks
would likely lead GURU to underperforming the overall market
indices. As a long-term play, the ETF should be able to adjust to
the market swings and if history is any indication, GURU looks
like a winner.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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