5/18/15

This past Friday was the deadline for the biggest-most influential investors in the world to publicly disclose their first quarter portfolio holdings to the SEC.

At BillionairesPortfolio.com, this quarterly event is our bread and butter. We scour through hosts of filings to uncover the best ideas from the world’s best investors. We want to know what they like and how convicted they are in their opinions. High conviction typically equals a very large stake. And just like stakeholders in companies tend to make good employees, large shareholders in companies tend to make good investors. They tend to fight relentlessly to get what they want, and need, from management, to turn their investment into a profitable one.

For insight into some of the highest conviction individual stocks owned right now, by the most powerful investors in the world, see my Nasdaq.com piece from last week (here). Today, I want to talk about the massive positions that have been taken by billionaire investors in ETFs and Options. As some of these investors have become so large, and as the investing environment has become so dependent on the macro picture, we have found that more and more of the biggest investors in the world are utilizing ETFs and options, in addition to individual stocks.

With that, here are the five biggest ETF and/or option positions we found at the top of our billionaire investor and hedge fund list.

1) One of the biggest and boldest option trades of the first quarter was made by billionaire hedge fund manager David Tepper. Tepper has perhaps the best track record over the past 20 years, returning close to 40% annualized, before fees. According to his recent filing, he initiated a more than $1.3 billion call option on stocks, via both the S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ). The notional value of this option position represents about one third of Tepper’s equity assets under management. This is no surprise, given he recently said he thinks the S&P 500 is still cheap and should return 15% this year. That’s another 11% from current levels.

2) Billionaire hedge fund manager Stephen Mandel of Lone Pine Capital took a $2 billion bearish option position (puts) on the euro ETF (FXE). The European Central Bank is in the early innings of a massive QE campaign, which, as the ECB chief Mario Draghi has explicitly said, tends to result in a falling exchange rate.

3) Billionaire global macro hedge fund manager Louis Bacon of Moore Capital Management reported a $1 billion+ call option on the S&P 500 ETF (SPY). This is another example of a top billionaire hedge fund manager taking a levered bet that the stock market will resume climbing.

4) Billionaire John Paulson, who is having an excellent 2015, reported a $1.1 billion call option on gold through the SPDR Gold Shares ETF (GLD). Paulson has been a long-term bull on gold.

5) Hedge fund manager Michael Masters of The Marlin Fund, reported two huge option positions according to his SEC filing. Masters was recently named by Barron’s as one of the top three performing hedge funds over the past three years, returning 42% annualized. According to his recent SEC filing, The Marlin Fund has a nearly $600 million call option in Citi (C), and a $193 million call option on UPS (UPS). Masters is very bullish on stocks. He also had $105 million call option on the Nasdaq 100 ETF (QQQ).

BillionairesPortfolio.com helps average investors invest alongside Wall Street billionaires. By selecting the best ideas from the best billionaire investors and hedge funds, our exited stock investment recommendations have averaged a 31% gain since 2012, beating even Carl Icahn’s record for the same period.