As the market continues to tread water, more investors are looking towards alternative strategies to generate returns. Not satisfied with owning funds like the SPDR Dow Jones Industrial Average (NYSE:DIA) and following the tenants of plain index investing, many are taking an active role in portfolio construction. With the birth of the internet and a host of financial media outlets available, following the lead of endowments and markets gurus has never been easier. Individuals are now able to model their own portfolios after some of biggest names. Here are some of the biggest market pundits' latest calls and how you can profit from them.
TUTORIAL: Exchange Traded Funds

The Richest Man in the World
With a fortune totaling approximately $53.5 billion, Mexico's Carlos Slim beat out Microsoft founder, Bill Gates and everyone's favorite value investor Warren Buffett to be crowned the world's richest person. While the majority of Slim's fortunes lie within his vast telecommunications empire including stakes in America Movil (NYSE:AMX), the billionaire has shown his preference for Latin America. Slim's publicly disclosed shares in U.S. markets represented less than $500 million of his total holdings. The billionaire said of his investments, "We believe in all Latin America and that's why we're investing. The macroeconomic variables are sound, healthy and many of the countries have raw materials that are having good prices."

Recently, Slim has been boosting his investments in Colombia due to the country's open policy on oil exploration, overall mineral assets and its growing middle class. For investors looking to profit from Slim's moves in Latin America, the iShares MSCI Mexico (NYSE:EWW) makes an interesting choice. The ETF holds many of Carlos' companies, including America Movil, Telefonos de Mexico (NYSE:TMX) and Grupo Carso. Slim's new found love for Colombia can be accessed through the Global X FTSE Colombia 20 ETF (NYSE:GXG). More than a third of GXG's holdings are dedicated to companies from the gas and oil sectors. (For related reading, see Introduction To Exchange-Traded Funds.)

A Chinese Bear
Known for correctly predicting Enron's 2001 collapse, hedge fund manager Jim Chanos has set his sights on what he calls the biggest bubble of all time: China. Chanos believes that Chinese real estate developers have too much land on their balance sheets, echoing the U.S. housing market just before it crashed. Chanos forecasted that the Chinese housing market would crash last year. In addition, Chanos believes that many Chinese stocks are grossly overvalued and the latest market call was to short New York-listed Chinese stocks.

For those investors wanting to bet against the Asian Dragon, there are a few options. The most heavily traded is the ProShares UltraShort FTSE China 25 (NYSE:FXP). This leveraged ETF seeks the daily investment results that correspond to twice the inverse of the daily performance of the FTSE China 25 Index. Ultimately, it shorts the popular iShares FTSE China 25 Index Fund (NYSE:FXI). However, so far Chanos has been on the wrong side of this bet, with the FXI flat and FXP losing nearly 11% since the beginning of the year.

The Bond King
When it comes to bonds, no one has more clout than Bill Gross. As the manager of the PIMCO's $240 billion total return fund, when Gross speaks about the U.S. treasury market, investors tend to listen. So when he decided to not only dump his fund's U.S. Treasury holdings but actually moved into a short position on the government's debt, people took notice. The fund increased its short position to 4% in May. The ProShares Short 20+ Year Treasury (NYSE:TBF) allows investors to short long-term treasury bonds, while the Direxion Daily 20+ Yr Treasury Bear 3X (NYSE:TMV) provides a leveraged short position. (For related reading, see The Advantages Of Bonds.)

Mr. Commodities
The legendary investor Jim Rogers is "incredibly pessimistic about the long term, or even the intermediate-term future," of the U.S. dollar. Roger's advice for retail investors is to stick to gold and hard commodities. As both a way to play emerging market growth and avoid being stuck in greenbacks when the levee breaks, commodities offer the best of both worlds. The ELEMENTS Rogers Commodity ETN (NYSE:RJI) tracks a commodities index designed by Rogers and the ETFS Physical PM Basket Shares (Nasdaq:GLTR) offers a way to play the precious metals sector. (For more, see ETF's Provide Easy Access To Energy Commodities.)

The Bottom Line
With the wealth of new investment products hitting the market, it's easy to follow the advice and trades of the smart money elite. The previous exchange traded funds are just some of the ways that retail investors can piggy-back some of their favorite money managers.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Chart Advisor

    Gold Struggles to Climb Higher and May Fall Soon

    Traders will be watching the price of gold over the coming weeks. We'll take a look at how a couple major moving averages are suggesting that the next move could be lower.
  2. Mutual Funds & ETFs

    ETF Analysis: United States Brent Oil Fund

    Learn more about the United States Brent Oil exchange-traded fund, the characteristics of the fund and the suitability and recommendations of it.
  3. Mutual Funds & ETFs

    ETF Analysis: ProShares Ultra Bloomberg Crude Oil

    Find out more about the ProShares Ultra Bloomberg Crude Oil ETF, the characteristics of UCO and the suitability and recommendations of UCO for investors.
  4. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI Hong Kong

    Learn about the iShares MSCI Hong Kong fund, which invests in various equities of companies listed on the Hong Kong Stock Exchange.
  5. Mutual Funds & ETFs

    ETF Analysis: Vanguard Small-Cap Growth

    Take a close look at the Vanguard Small-Cap Growth ETF, which focuses on domestic small-cap equities with a fundamental growth strategy.
  6. Mutual Funds & ETFs

    ETF Analysis: First Trust Dorsey Wright Focus 5

    Take a closer look at the First Trust Dorsey Wright Focus 5 ETF, a unique and innovative fund of funds based on momentum and relative strength.
  7. Mutual Funds & ETFs

    ETF Analysis: iShares National AMT-Free Muni Bond

    Take an in-depth look at the iShares National AMT-Free Municipal Bond ETF, a highly diverse and very popular muni bond fund.
  8. Mutual Funds & ETFs

    Top 3 Switzerland ETFs

    Explore detailed analysis and information of the top three Swiss exchange-traded funds that offer exposure to the Swiss equities market.
  9. Stock Analysis

    Net Neutrality: Pros and Cons

    The fight over net neutrality has become an amazing spectacle. But at its core, it's yet another skirmish in cable television's war to remain relevant.
  10. Investing News

    Fund Firm Jolts: Pimco's Isn't The First Or Worst

    When you business is built on prudence and trust, a lot can go wrong to cost you tons of clients and assets. Here are a few examples.
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  3. Security

    A financial instrument that represents an ownership position ...
  4. Discount Bond

    A bond that is issued for less than its par (or face) value, ...
  5. Exchange-Traded Mutual Funds (ETMF)

    Investopedia explains the definition of exchange-traded mutual ...
  6. Accelerated Return Note (ARN)

    A short- to medium-term debt instrument that offers a potentially ...
RELATED FAQS
  1. What are the maximum Social Security disability benefits?

    The maximum Social Security disability benefit amount for a single eligible person in 2015 is $1,165 per month, but you can ... Read Full Answer >>
  2. What is the relationship between the current yield and risk?

    The general relationship between current yield and risk is that they increase in correlation to one another. A higher current ... Read Full Answer >>
  3. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  4. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  5. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>
  6. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!