The iBillionaire Index Outperforms the Market — Up 11.6% YTD
iBillionaire index rebalance
iBillionaire Index Outperforms — Up 11% YTD
Global stock markets started the year strong and President Trump’s post-election market rally continued into the first quarter of 2017. March and April were a little uncertain as global leaders began to question the President’s ability to fulfill his election campaign promises. Despite this, the Fed raised interest rates in March, contemplating another 2 more expected rises for the year, and U.S. companies reported higher-than-expected earnings resulting in a strong quarter of growth. The iBillionaire Index enjoyed sturdy growth, beating many major indexes, and is up over 11% for the year.
The Technology Sector lead many of the gains in the U.S. market during the first couple months of 2017. Apple and Google stocks were up around 15% and payment processing giant PayPal was up almost 20% Q/Q. These big gains in the tech sector have prompted billionaires to add more tech-focused stocks to their portfolio, including an additional share class of Google. Allocation to the Information Technology Sector within the IBLN Index was up 20% since the last rebalance, with the addition of new stocks including Salesforce, Micron, and Symantec. Activision Blizzard and Electronic Arts were also added this quarter, and represent an interesting trend reflecting the rise of a new eSports industry. Tech stocks now represent close to half of the IBLN Index and include all Big 5 tech companies: Apple, Google, Amazon, Facebook and Microsoft.
The Consumer Discretionary Sector also saw a big increase for the quarter, with new companies Comcast, Nike and Priceline added to the Index. The Consumer Sector now represents 23%.
Historical Sector Allocation
Despite an increase in the overall market, the Financial sector did not experience the same level of growth and continues to suffer from a lot of political uncertainty that continues to swirl around in the banking and finance industry. Promised new policies from President Trump regarding the regulatory space have hit one or two road bumps which have been reflected by the leveling off of growth within the Financial Sector. Within the IBLN Index, Financials allocation is down 13.3% versus the prior quarter, with Citigroup, JP Morgan Chase, PNC and Wells Fargo dropping out. Interestingly, all 4 of these stocks were new adds in Q4 2016, but are now no longer part of the Index. The Financials Sector now represents just 6.7% of the IBLN.
Another sector that’s also less represented relative to last quarter is Healthcare. The number of stocks held in the IBLN Index has halved during this quarter’s rebalance, with Abbie, Humana and Merck removed.
Looking to the future, continued questions will arise for President Trump and his answers will have large impacts in the economy depending on how they play out. Fluctuations within the U.S. economy will result in different investment sectors continuing to come in and out of favour, so it is certainly advisable to keep one’s eyes and ears open.
IBLN
In
- ACTIVISION BLIZZARD INC (INFORMATION TECHNOLOGY)
- COMCAST CORP-CLASS A (CONSUMER DISCRETIONARY)
- SALESFORCE.COM INC (INFORMATION TECHNOLOGY)
- ELECTRONIC ARTS (INFORMATION TECHNOLOGY)
- GOOGLE INC-CL A (INFORMATION TECHNOLOGY)
- NIKE INC -CL B (CONSUMER DISCRETIONARY)
- PRICELINE GROUP INC/THE (CONSUMER DISCRETIONARY)
- SYMANTEC CORGROUP (INFORMATION TECHNOLOGY)
Out
- CITIGROUP (FINANCIALS)
- ABBVIE INC (HEALTH CARE)
- HALLIBURTON CO (ENERGY)
- HUMANA INC (HEALTH CARE)
- JPMORGAN CHASE & CO (FINANCIALS)
- MOHAWK INDUSTRIES INC (CONSUMER DISCRETIONARY)
- MERCK & CO. INC (HEALTH CARE)
- PROCTER & GAMBLE CO/THE (CONSUMER STAPLES)
- PNC FINANCIAL SERVICES GROUP (FINANCIALS)
- WELLS FARGO & CO (FINANCIALS)
Billionaire Remain Bullish on Equities
“Still long stocks.” — David Tepper
Earlier in the year, Appaloosa Management founder David Tepper, says that he still remains bullish on the stock market rally. Warren Buffett also feels the same and both the respected Wall Street investors remain optimistic that the stock market will continue its ascent.
Technology Sector, Not Governments, Are Building The Future
The rise is technology stock in the IBLN Index shows how Billionaires are starting to bet more on these types of companies and continue to do so quarter over quarter. In particular, most of the Billionaires own one or more of one of the 5 top tech companies: Apple, Facebook, Amazon, Microsoft and Google. These giant 5 are beginning to build monopolies in their own ways and have a huge influence on the shape of the tech market. Examples include Google Search, Amazon eCommerce and Apple phones, and these companies are even beginning to carve out their own new markets that didn’t exist before; self-driving cars and augmented reality are prime examples. It’s no wonder that Billionaires are highly invested in these 5 companies.
Stock to Watch: Amazon
“I did not think (Jeff Bezos) could succeed on the scale that he has … I underestimated the brilliance of the execution. It takes a lot of ability.” — Warren Buffett
In his 2017 annual letter to Berkshire Hathaway shareholders, Warren Buffett admits he made a mistake on not buying Amazon. “I was too dumb to realize what was going to happen,” says Buffett. Amazon stock is up over 38%* in the last year alone and the innovative company, led by CEO Jeff Bezos, continues to roll out new product lines and frequently make headlines
Billionaire Stan Druckenmiller is also a big fan of Amazon stock. “Oh yeah, I love Amazon,” says Druckenmiller, who in particular admires Amazon’s profitable cloud-computing business, Amazon Web Services.
IBLN HOLDINGS
- APPLE
- ALLERGAN
- AMERICAN INTERNATIONAL GROUP
- AMAZON.COM INC
- ACTIVISION BLIZZARD INC
- AVAGO TECHNOLOGIES LTD
- BANK OF AMERICA CORP
- BAXTER INTERNATIONAL INC
- CHARTER COMMUNICATION-A
- COMCAST CORP-CLASS A
- SALESFORCE.COM INC
- DOW CHEMICAL CO/THE
- ELECTRONIC ARTS INC
- FACEBOOK INC-A
- FREEPORT-MCMORAN INC
- GENERAL MOTORS CO
- GOOGLE INC-CL C
- GOOGLE INC-CL A
- LYONDELLBASELL INDU-CL A
- MICROSOFT CORP
- MICRON TECHNOLOGY INC
- MYLAN NV
- NIKE INC -CL B
- PRICELINE GROUP INC/THE
- PAYPAL HOLDINGS INC
- CONSTELLATION BRANDS INC-A
- SYMANTEC CORP
- TIME WARNER INC
- VISA INC-CLASS A SHARES
- YAHOO! INC
Fundamentals
0.90% Indicated Dividend Yield
39.17 P/E Ratio
178 Avg Market Cap
809 Max Market Cap
17B Min Market Cap
30 Holdings
Methodology
The IBLN Index tracks the highest conviction S&P 500 stocks, as determined by the advisor, held by leading U.S. investment managers. The data is based on the managers’ regulatory filings with the SEC.
The Process
Billionaire selection
iBillionaire examines annually a universe of 100 billionaires who have built their fortunes through investing in the stock market. It identifies and tracks the top 10 managers whose public S&P 500-listed equity positions have generated the greatest returns over the past three years.
Stock selection
The Index includes top 30 stocks based upon their cumulative exposure across the tracked billionaires portfolios.
Rebalance
The top 10 billionaire investor managers selected by iBillionaire for the IBLN Index are evaluated and assigned annually in October. The equity components of the index are rebalanced each quarter in conjunction with 13F filings, which are released 45 days after the end of each calendar quarter.
Historical performance is not a guarantee of future returns. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in loss. Not endorsed by, affiliated with, sponsored by, or fully reflective of the “billionaires” or their companies. The information contained on and used by our site and in our apps includes the names, brief biographical information, and references the companies of certain persons whom iBillionaire has identified from publicly available information as high net worth and financially sophisticated personal investors, most of whom are public figures. iBillionaire does not communicate with and is not supported or endorsed by or affiliated or associated with any of these individuals or their companies. To the extent these individuals use their names or the names of their companies as trademarks, such trademarks belong to their respective holders, and iBillionaire’s use of the same does not imply any affiliation with or endorsement by them. Information about the investments of the listed billionaires is limited to that which is publicly available in regulatory filings and may not provide a complete picture of each of their personal investment strategies. Daily and annual performance rates for the billionaires are calculated based on this limited information and will not accurately reflect each billionaire’s personal investment return. In addition, certain information is gleaned from filings made by companies substantially owned or controlled by one of the billionaires, which we have attributed to the billionaire personally.
