By: Chris Rowe — October 1, 2013
Technical Tuesday: How to DOUBLE the S&P's Performance
There's a little known way that you can profit like the most successful hedge funds do, without having to be "super-wealthy". That's right, there's no minimum!
What's more, you don't have to pay the typical 2% fee and 20% of the profit.
The best part of it all is it's a fund that literally DOUBLED the returns of the S&P 500 so far this year (not counting dividends).
I know you're waiting for "the catch" because that's usually what comes next when you read something like this. But it just gets better and there is no catch.
Today I'll share a secret of how to get around all the restrictions hedge funds have and still reap the rewards.
The "Global X Funds Top Equity Holdings ETF" (Symbol: GURU) is up 35.93% while the S&P 500 is up 18.7%. Considering what this ETF actually is, that's an amazing statement because hedge funds are performing horribly so far this year.
So what are we talking about here? What is this Exchange Traded Fund?
This is straight off of the globalxfunds website:
For example, hedge funds with high turnover are eliminated from the pool. The goal of the Global X Top Guru Holdings Index ETF (GURU) is to aggregate on a quarterly basis the ideas and knowledge of hedge fund managers into the transparent, cost-efficient and easily accessible format of an ETF.
If you're going to be bullish on the market, why not be bullish on the best hedge fund picks in the market?
Hedge funds pay hundreds of millions of dollars for information leading to investment opportunities.
They usually require a minimum investment in the millions. They have a lock-up period of several years (you can't ask for your money back for years) and then you're only allowed to ask for money back on specified days (usually quarterly).
You have to pay the fund 20% of your profits and get charged a 2% fee. Now, as long as you're making money, who cares?
But if you don't want to -- or can't -- plunk millions into a fund to be locked up for years, and you don't want to pay the 2% fee and 20% of your profit, you might want to consider GURU as one of your investments.
Here are the top 10 holdings in GURU
If you don't want to invest in this ETF because it is still young (trades light volume, has a low amount of assets) then you can simply invest in some of its top holdings. You pick and chose what looks best to you. In fact, if you know how to use the "stock replacement strategy" -- a VERY effective options strategy that significantly reduces your downside and increases your profit potential -- then you can feel free to do so with a few of the top positions in GURU.
With every month that passes, it amazes me how easy investing has become. Individual investors have all the power that institutions have without the disadvantage of trying to enter or exit positions without moving prices.
I hope this is a helpful weapon that you'll add to your arsenal. When your friends are talking about this in a few years, remember that you heard it here first in Technical Tuesdays.
See you next week!