A new index from iBillionaire monitors the dividend stock trades of some of the top hedge fund masters of the universe, such as Carl Icahn, Ray Dalio, David Tepper and Nelson Peltz.
The result can be a great source of investing ideas for average consumers, according to
Forbes contributor Charles Sizemore, chief investment officer at Sizemore Capital Management.
The iBillionaire High Dividend Index is a basket of 50 high dividend stocks held by some of the world's top traders and investors, according to
iBillionaire, and provides an enticing 5.34 percent dividend yield.
Its top 10 holdings are Talisman Energy, Cablevision, General Motors, Time Inc., Ameren, Dominion Resources, Extended Stay, Kinder Morgan, Tronox and Exelon.
Sizemore said the index comes along at an opportune time.
"The 30-year U.S. Treasury is scraping along near all-time lows, and most income-focused investments have gotten prohibitively expensive. This is perhaps the trickiest market in history for income investors to navigate, so it's instructive to see what the big boys are buying," he wrote.
iBillionaire tracks the trading decisions of an estimated 25 billionaire investors based on their quarterly Securities and Exchange Commission filings. In addition to those above, its list also includes Warren Buffett, David Einhorn, Leon Cooperman, Stanley Druckenmiller and Bill Ackman, according to the
iBillionaire blog.
"I don't believe in mindlessly copying the trading moves of other investors, no matter how storied their careers, but I do consider guru-following strategies to be a fantastic source of trading ideas," Sizemore explained.
He noted the iBillionaire High Dividend Index has a 24 percent allocation to energy shares, including Kinder Morgan, Williams Companies and BP, but some of those purchases could have been made prior to the oil crash.
The index also has a high allocation to mortgage REITs such as Northstar Realty, American Capital Agency and Chimera Investment. "Investors right now are scared to death of mortgage REITs, fearing that eventual tightening by the Fed will pinch their interest spread. It's interesting that the billionaire masters of the universe appear to see value," Sizemore said.
There is no mutual fund or exchange-traded fund that incorporates the index, so investors are left with analyzing the components on their own. "That's ok. In its current form, it gives us a 'fishing pond' of good income investment ideas to research further," he noted.
Some of the world's elite investors are attending the World Economic Forum in Davos, Switzerland, this week, and
CNBC suggested some of them go there to compare notes with one another.
"Going to Davos helps generate investment ideas and manage risk by giving attendees a better understanding of the global dynamics driving markets," one unidentified handler for a prominent hedge fund manager told CNBC.
© 2024 Newsmax Finance. All rights reserved.