John Burbank (Trades, Portfolio), chief investment officer of Passport Capital LLC, seeks long-term capital growth through a concentrated portfolio of public and private investments.
During the first quarter, Burbank eliminated his positions in four exchange-traded funds: SPDR S&P 500 (ARCA:SPY, Financial), iShares MSCI Emerging Index Fund (ARCA:EEM, Financial), SPDR Gold Trust (ARCA:GLD, Financial) and PowerShares QQQ Trust Series 1 (QQQ, Financial).
SPDR S&P 500
Burbank sold his 8.576 million share stake in the SPDR S&P 500 ETF at an average price of $232.29. The guru chopped 32.28% of his portfolio with this transaction.
According to the SPDR Web site, the SPDR S&P 500 tracks the performance of the Standard & Poor’s 500 index, one of three major U.S. stock market indexes. As of May 15, the S&P 500 index had a Shiller P/E ratio of 29.7, which is near a 10-year high and approximately 76.8% higher than the historical mean of 16.8. The U.S. stock market is expected to return -1.8% per year based on this valuation.
iShares MSCI Emerging Index
Burbank sold 18,401,300 shares of the iShares MSCI Emerging Index Fund (EEM) at an average price of $37.94. The guru trimmed 10.85% of his portfolio with this transaction.
According to the iShares website, EEM seeks to track the performance of large-cap and mid-cap companies in emerging markets like China, South Korea and Taiwan. Such companies include Samsung Electronics Ltd. (XKRX:005930, Financial), Tencent Holdings Ltd. (HKSE:00700), Taiwan Semiconductor Manufacturing (TSM) and Alibaba Group Holding Ltd. (BABA). The former three companies currently trade near a 10-year high:
- Samsung: 2.291 million Korean won ($2,037.16) per share.
- Tencent Holdings: 258.2 Hong Kong dollars ($33.12) per share.
- Taiwan Semiconductor Manufacturing: $34.95 per share.
SPDR Gold Trust
Burbank sold his 5 million-share stake in the SPDR Gold Trust at an average price of $116.14. The investor trimmed his portfolio 9.23% with this transaction.
The SPDR Gold Trust seeks to reflect the performance of the price of gold. According to FRED (Federal Reserve Economic Data), ICE Benchmark Association Ltd. provides the auction platform and methodology of the London Bullion Market Association Gold Fixing Price. The price of gold changes twice daily, at 10:30 a.m. London Greenwich Mean Time (GMT) and 3:30 p.m. London GMT. Gold traded at around $1,228 per Troy ounce as of May 12. Although this price is near the 10-year median, gold prices have declined since reaching a 10-year high of $1,794.50 Aug. 11, 2011.
PowerShares QQQ Trust Series 1
Burbank sold 4,283,800 shares at an average price of $127.59. The guru trimmed his portfolio 8.55% with this transaction.
According to Invesco.com, the PowerShares QQQ Trust seeks to track the performance of the Nasdaq 100 index, which consists of the largest 100 nonfinancial companies trading on the Nasdaq stock exchange based on market cap. It currently trades near a 10-year high of $138.90.
Disclosure: I do not have positions in the ETFs mentioned in the article.
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