It’s that time again. The Direxion iBillionaire Index ETF (NYSEARCA:IBLN), which follows the trading moves of billionaire investors, is doing its quarterly rebalancing. Eleven of the ETF’s 30 stock positions are getting the boot.
What’s in? Consumer discretionaries and tech, each of which will now make up 30% of IBLN’s portfolio.
Getting kicked to the curb are energy and financial stocks. After the rebalancing, energy will make up just 7% of the portfolio, and financials will not be represented at all.
While I would never recommend blindly following the moves of other investors, I’m a big fan of guru-following strategies and consider them a great starting point for further research.
The brains at iBillionaire have their own unique take on guru following. They start with narrowing their pool of gurus to the 10 billionaire investors whose public, S&P 500-listed stock positions have generated the highest returns over the past three years. They then build a portfolio of the 30 “highest conviction” S&P 500 stocks owned by these 10 billionaires and rebalance quarterly.
This makes IBLN a high-quality subset of the S&P 500. And unlike most guru ETFs, which are often invested in small- and mid-cap stocks, the S&P 500 is actually the appropriate benchmark. Year-to-date, IBLN is up about 2.7%, keeping pace with the S&P 500.
With no further ado, let’s take a look at five hot stocks the masters of the universe are buying.