Global X Guru ETFs Make It Easy To Invest Like A Pro
One of the most valuable things an investor can do is read Form 13F.
As you may know, the SEC requires institutional investors with more than $100 million in US equity investments to publish their stock holdings. They must file Form 13F with the SEC within 45 days of the end of a calendar quarter.
In other words, Form 13F tells you exactly what stocks successful stock pickers like Warren Buffet, Carl Icahn, George Soros, and John Paulson are buying and selling.
Needless to say, that’s some powerful information.
The investors and hedge funds that file a 13F spend lots of money to uncover the best investment opportunities. So, they probably know a little more about the companies and stocks they’re investing in than your everyday investor.
Even if you have enough money in order to invest with these large hedge funds, you’d have to pay a 2% management fee and 20% performance fee.
However, wading through the massive amount of information and making a buy or sell decision based on this information is no easy task.
Luckily a family of ETFs from Global X makes investing based on 13F filings simple.
Global X Funds is a fast growing ETF provider that likes to come up with new ways to use ETFs. And their use of 13F filings to create an index for an ETF to track certainly qualifies as innovative.
The first ETF Global X launched to track an index based on 13F filings was the Global X Guru Index ETF (GURU). The index of stocks GURU tracks is made of the highest conviction ideas from a select pool of hedge funds.
They eliminate funds that trade in and out of stocks quickly. The high turnover of stocks at these places make their 13F Forms worthless. They’ve probably bought and sold the stock before they ever report owning it on their 13F.
Once they identify the Hedge Funds with 13Fs worth paying attention to, Global X drills down even further…
They dig through the 13Fs to find the one stock each Hedge Fund has the most conviction in. Then they invest an equal amount of money into each holding.
These stocks are held for one quarter. And they run the analysis and rebalance the ETF after the 13Fs are filed in the following quarter.
Most importantly, the strategy is working…
Since GURU was launched in June of 2012, it’s up 66%. It’s handily outperforming the S&P 500 that’s up 50% over the same time. And thanks to its strong performance, GURU has amassed $456 million in assets under management.
They success of GURU led to Global X launching two new ETFs based on 13F filings.
In March, they launched the Global X Guru Small Cap ETF (GURX) and Global X International ETF (GURI).
GURX and GURI follow the same stock selection methodology but apply it specifically to small-cap and international stocks.
The timing of the launch for GURI and GURX was poor. International and small-cap stocks have been underperforming and out of favor with investors this year.
But the time will come when small-caps and international stocks are back in vogue. And GURX and GURI have the potential to outperform traditional benchmarks in the same way GURU has outperformed the S&P 500.
Here’s the upshot…
Form 13F provides investors with valuable information about what the richest and most successful investors are doing with their money. And Global X uses this information to make some of the most innovative and successful ETFs that should be on every investor’s short list.
Good Investing,
Corey Williams
Category: ETFs, Investment Style ETFs
