Daily ETF Watch: iBillionaire ETF To Launch

June 26, 2014

iBillionaire, the firm that created an index by the same name, has now updated regulatory paperwork to launch an ETF called the Direxion iBillionaire Index ETF (IBLN) that’s similar to the Global X Guru ETF (GURU | B-55), but cheaper.

The security offers the prospect of outperforming the S&P 500 Index at a time when the stock benchmark is reaching new highs after surging 32 percent last year. Year-to-date, the S&P is up more than 6 percent, as investors continue to feed off of the Federal Reserve’s dovish stance on short-term interest rates.

IBLN will track the iBillionaire Index comprising 30 U.S. large- and midcap securities favored by the likes of Warren Buffet, Carl Icahn and George Soros, as stated in 13F filings.

Global X’s GURU has $496 million in assets and gathered $363.6 million last year, according to data compiled by ETF.com’s screener. 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.

 

Russell Indexes Reconstitution

Russell Investments has updated its official preliminary lists of companies set to join or leave the Russell Global Index, Russell 3000Index and Russell Microcap Index when the annual reconstitution for its U.S. equity indexes concludes on June 27.

Each June, Russell completely realigns its family of global equity indexes to reflect market changes in the past year. The largest three companies in the Russell U.S. Indexes in terms of total market capitalization at this year’s reconstitution are Apple ($545.3 billion), ExxonMobil ($431.7 billion) and Google ($385.6 billion).

The largest company in the Russell Global ex-U.S. Index is now Netherlands-based Royal Dutch Shell PLC, with a total market cap of $254.5 billion, replacing PetroChina Co.

Of the 846 new additions to the Russell Global Index at reconstitution (41 of which are IPOs), the U.S. gained the largest number of new companies through the reconstitution process (148), followed by Taiwan (68), China (67), Japan (59) and the United Kingdom (56).

The U.S. led all Russell Global Index country constituents in IPO additions at reconstitution with 27, followed by the U.K. (7) and China (5). Also, as previously announced on March 3, Egypt, formerly classified as an emerging market, will enter the Russell Frontier Index effective June 27.

 

 

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