George Soros, the billionaire chairman of Soros Fund Management, LLC, has long been opposed to President Donald Trump, making his views clear at a number of public speeches and engagements. According to a report by Reuters, the investor indicated earlier this year that he felt that markets would falter due to uncertainty concerning the President. Now, according to U.S. regulatory filings that Soros Fund filed in the past few days, it seems that the billionaire has matched up his investments with his predictions. As of June 30, Soros held a number of positions which were likely to profit if the financial markets did, in fact, stumble.
Soros Was Convinced Trump Would "Fail"
As of January of this year, Soros spoke at a dinner at the World Economic Forum in Davos, Switzerland, predicting that Trump's actions would lead him to falter. "It's impossible to predict" the actions of the political newcomer, Soros suggested, but the billionaire remained "convinced that he is going to fail."
Now, the investor's 13F from Q2 of this year reveals that he held put options on iShares Russell 2000 ETF (IWM) and PowerShares QQQ Trust (QQQ), plus SPDR S&P 500 ETF (SPY). Each of these three names is an exchange-traded fund which tracks a different broad U.S. stock market index. By definition, puts generate profit for their holders when the equity that they are tied to declines in value, so Soros is effectively betting against a number of broad market indices. All together, the Soros puts as of the end of Q2 were valued at almost $1.8 billion, and they constitute three of the four largest holdings made public in the 13F report.
Exact Nature of Holdings Remains Unclear
While these three holdings do suggest that Soros is making a bet against the markets, possibly related to the statements he has made regarding Trump, it's important to keep in mind that 13Fs do not offer a full picture of an investor's holdings. For Soros, the SPY put may be offset by a corresponding long position in the ETF, which is valued at $2.7 million, as well as a call option with a value of almost $50 million. Unlike puts, calls generate profit along with the corresonding equity. This is all to say that some or all of Soros' investments could be used to hedge his bets in other areas of his portfolio, some of which may not be made public via the requirements of the 13F.
Soros is respected as one of the greatest investors working today. He grew to fame in 1992 when he bet against the British pound, becoming a billionaire almost overnight in the process.