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Exotic Alphabet Soup "Top ETFs Get Billionaires" Confidence

September 25, 2013 | About:
Sally Jones

Sally Jones

49 followers
The world of ETFs seems somewhat cloistered, reserved for those who are already in the know. Sorting through the top-ranked exchange traded funds can start to look like foreign alphabet soup after a while, and these exotic-sounding funds often lack the most basic information for educational purposes. And yet, billionaire investors hold these open-ended management investment companies in their top holdings.

So how can one learn more about ETFs and their value and validity? Tracking billionaires who own them is a good start, and look for GuruFocus warnings on each stock. If may also be a good time to try a GuruFocus Global Premium Membership to access more opportunities around the world.

Here’s a look at three of the top ETFs, and the billionaires who hold them as of the second quarter of 2013.

PowerShares QQQ Trust, Series 1 ETF (QQQ)

Up 15% over 12 months, QQQ has a market cap of $35.75 billion. The current share price is around $78.59. The dividend yield is 1%.

Warnings: The GuruFocus checkup on the financials and performances of PowerShares QQQ concluded that there is not enough data about the fund; it has a low Piotroski F-score, implying poor business operations, and its interest coverage is extremely low, meaning the company may have to issue more debt.

Track share pricing since year 2000:

1380128566644.png

Guru Action: As of June 30, 2013, there are nine guru stakeholders holding QQQ and a number of puts and calls.

The top Guru stakeholder is David Tepper who made a new buy of 5,750,000 shares in the second quarter, buying at an average price of $71.45 per share, for a gain of 10.8%. His current shares of 5,750,000 represent 1.23% of shares outstanding and 5.9% of his total managed assets.

His trading history of six quarters shows double-digit gains in every quarter, peaking at 25.9%, when he bought 18,854,218 shares at an average price of $62.84 per share in the first quarter of 2012.

There were no guru sell outs of QQQ in the second quarter, but long-time stakeholder Steven Cohen reduced his holding by 87.04%, selling 38,278 shares at an average price of $71.45 for a gain of 10%.

His five-year trading history shows a gain of 23% on 1,445,016 shares bought at an average price of $63.89 per share, and a gain of 21% on 1,439,316 share sold at an average price of $64.77 per share.

iShares FTSE/Xinhua China 25 Index ETF (FXI)

Up 12% over 12 months, FXI has a market cap of $6.37 billion. The current share price is around $38.02. The dividend yield is 2.30%.

Warnings: The GuruFocus checkup on the financials and performances of FXI concluded that there is not enough data about the fund, and again, the company’s interest coverage is extremely low, meaning the company may have to issue more debt.

Track share pricing since year 2004:

1380131614651.png

Guru Action: As of June 30, 2013, there are six guru stakeholders holding FXI.

The top Guru stakeholder is Louis Moore Bacon who made a put on 365,000 shares in the second quarter. His shares represent 0.2% of shares outstanding and 0.28% of his total managed assets.

There were no guru sell outs of FXI in the second quarter, but three gurus reduced their positions: Ken Fisher reduced by 45.74%, Jim Chanos reduced by 57.05% and Steven Cohen reduced by 70.65%.

iPath S&P 500 VIX Short Term Futures TM (VXX)

GuruFocus research shows VXX is down 64% over 12 months, but there is very little data on this fund. VXX has an EV-to-EBIT ratio of 38.5 and a PEG of 1.7. Price/Tangible Book value is 0.4. The current share price is $13.88.

Warnings: The GuruFocus checkup on the financials and performances of VXX concluded that there is not enough data about the fund and its interest coverage is extremely low.

Track share pricing since year 2009:

1380130548477.png

Guru Action: As of June 30, 2013, there are three guru stakeholders holding VXX, making puts and calls. The top Guru stakeholder is Eric Mindich who holds 12 million shares, translating to 4.8% of his managed assets. Other stakeholders are Steve Mandel for 3,690,000, shares or 0.37% of his managed assets, and Murray Stahl for 979,300 shares or 0.67% of his managed assets.



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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 4.0/5 (4 votes)

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