The Ira Sohn Conference taking place this week in New York is
an annual gathering of premiere hedge fund managers that raises
money for cancer research.
The all-star list of big-league investors includes David
Einhorn, William Ackman, Jeffrey Gundlach and several other
Each participant is expected to give a brief update on their
best idea or investment strategy that coincides with the current
While the average investor will get only a brief glimpse of
the true portfolios these titans manage, it is possible to access
a portfolio of hedge fund favorites using an ETF.
The Global X Guru Index ETF (NYSE:
) is comprised of top U.S.-listed equity positions reported on
Form 13-F by a select group of well-known hedge funds. Each hedge
fund that has a concentrated position of more than $100 million
in a specific security must file Form 13-F to disclose the
This allows the broader public a peek (albeit 45 days old) at
the hedge funds top weightings at the end of each quarter.
Currently this ETF has net assets of over $500 million
invested in approximately 50 underlying securities with an annual
expense ratio of 0.75 percent.
Are Active ETFs Worth The Management Fee
The top three holdings in GURU include: Delta Airlines (NYSE:
), Celanese Corporation (NYSE:
) and Spirit Aerosystems (NYSE:
). Each holding within the underlying index is equally weighted
and screened for liquidity purposes.
One of the advantages of investing in an ETF rather than a
traditional hedge fund is avoiding the hefty two percent
management fee and 20 percent performance fee that is typical of
the industry. In addition, daily liquidity of investment dollars
is available. Private-label investment vehicles do not offer such
Over the last two years, the performance of GURU has been
quite impressive versus a traditional large-cap benchmark such as
the SPDR S&P 500 ETF (NYSE:
Over that time frame, GURU has gained 62.23 percent, while SPY
has returned 42.32 percent.
The unique index construction methodology of GURU has clearly
been worth the premium expense ratio when comparing total return
during this period.
To follow up on the success of this initial ETF, Global X
Funds also recently launched a small cap alternative in the
Global X Guru Small Cap Index (NYSE:
Both of these ETFs offer innovative ways to access previously
hard to find data on private fund holdings and will be
interesting to watch as their underlying constituents change over
© 2014 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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