Who wants to be an “iBillionaire”

By: Thomas Abrahamson, Spring 2014 Student Intern

moneyIf you are actively trading in the stock market you have without a doubt dreamt of becoming a billionaire at some point. Imagined having your name go down in history as a Wall Street giant with that of Warren Buffett, Carl Icahn, and Daniel Loeb. A new investment product is making the news as it seeks to help regular folks benefit from the expertise of the billionaire investment titans.

This month, the New York based mutual fund firm Direxion is planning to launch the iBillionaire ETF. According to its promoters, the iBillionaire Index is designed to track and measure the performance of those who have, over time, reaped the biggest rewards on Wall Street: “financial billionaires.” The fund is composed of the top 30 large-cap equities listed on the S&P 500 in which their chosen “financial billionaires” have allocated the most funds. They are able to uncover the billionaires’ latest stock activity by scouring through Form 4’s and 13F forms.

The iBillionaire ETF is not right for all investors. As with any investment you must make sure it fits within your risk tolerance and goals before purchasing. While the people at Direxion would like you to believe that by following the best of the best the EFT couldn’t possibly fail, that’s not the case. Anything can happen in the stock market and even the best financial minds make mistakes.

As of this time it is difficult to predict how well these strategies will perform in the real-world market. Only time will tell if it really is possible to piggyback on these giants of Wall Street. But smart investors will do their homework before jumping on the bandwagon.