Daily ETF Watch: iBillionaire ETF Coming

March 31, 2014

A GURU-like ETF offers up a cheaper alternative to investors.

iBillionaire Inc. has teamed up with Direxion to put into registration an exchange-traded fund that’s similar to the Global X Guru ETF (GURU | B-50), but cheaper. The security offers the prospect of outperforming the S&P 500 Index at a time when the stock benchmark is seemingly at pause after surging 32 percent last year.

The Direxion iBillionaire Index ETF will track the iBillionaire Index, which is composed of 30 U.S. large- and midcap securities favored by the likes of Warren Buffett, Carl Icahn and George Soros as viewed through the lens of 13F filings.

Year-to-date, the S&P is up 0.5 percent, as investors are still gauging the U.S.’ slow recovery and keeping a wary eye on the slowdown in China, the world’s second-largest economy.

Global X’s GURU has $536.5 million in assets and gathered $363.6 million last year, according to data compiled ETF.com Analytics. The fund returned 47.3 percent in 2013. The ETF tracks an equal-weighted index that attempts to mimic concentrated equity positions taken by large hedge funds, as reported in 13F filings.

Raul Moreno, co-founder of iBillionaire, said in a previous interview with ETF.com that his company’s proposed offering is looking to have exposure to a finite number of hedge fund managers (10) with large-cap holdings, whereas GURU tracks about 75 hedge funds with small- and midcap holdings.

“It’s a finer slice of GURU because we don’t want to be labeled as an alternative investment fund,” said Moreno. “We’re really competing against the S&P 500.”

The Direxion iBillionaire Index ETF will have an expense ratio of 0.65 percent, or $65 for every $10,000 invested, versus 0.75 percent, or $75 for every $10,000 invested, for GURU.

 

Find your next ETF

Reset All