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Insights Into 13F Filings: ETFs to Bet Like Billionaires

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The most-awaited 13F filings for Q1 2023 are here, and investors are keen on investing like billionaires.

The filings reveal a portion of the investment moves made by hedge funds and institutional investors overseeing at least $100 million in assets under management for each quarter. These shed light on what the biggest fund managers bought and sold during the quarter that was marked by the bank crisis, subsiding inflation, and slowing interest rate hikes.

With the help of the 13-F filing, we have highlighted some smart stock-selection techniques and the most-appropriate ETFs that fit in each category for investors seeking to bet like billionaires.

Keep Loving Apple 

The legendary investor Warren Buffett continued to love Apple (AAPL) and said it is a better business than any other in Berkshire Hathaway Inc.'s portfolio. He revealed a $1-billion stake in Apple in May 2016 and by March 2023, boosted it to $151 billion. Now, Apple makes up about 45% of Buffett’s portfolio. "It's an incredibly valuable utility," Buffett said about the iPhone maker in a recent interview with CNBC (read: Take a Bite of Apple With These ETFs Post Solid Q2 Earnings).

ETFs with maximum exposure to Apple, like Technology Select Sector SPDR Fund (XLK - Free Report) , Vanguard Information Technology ETF (VGT - Free Report) and MSCI Information Technology Index ETF (FTEC - Free Report) should be the most compelling picks. Apple makes up more than 20% of the assets in each ETF portfolio.

Add Regional Banks

Despite the turmoil in the industry, famed short-seller Michael Burry loaded up $23.4 million worth of regional bank stocks in the first quarter. These include PacWest Bancorp (PACW), Western Alliance Bancorporation (WAL), New York Community Bancorp (NYCB), Capital One (COF) and Wells Fargo (WFC). The legendary investor Warren Buffett also bought the dip in U.S. banks. Although Buffett exited his long-held positions in U.S. Bancorp (USB) and Bank of New York Mellon (BK), he took new stakes in Capital One Financial and increased his stake in Bank of America (BAC) and Citigroup (C).
SPDR S&P Regional Banking ETF (KRE - Free Report) and iShares U.S. Regional Banks ETF (IAT - Free Report) are the two popular ETFs in the regional bank space. Though both ETFs currently have an unfavorable Zacks Rank #4 (Sell), hedge funds think that most of the banking shares are at a bargain and worth buying.

Bullish on China’s E-Commerce

Michael Burry boosted his bullish bets on Chinese e-commerce giants like Inc. (JD) and Alibaba Group Holding Ltd. (BABA) even though the other hedge funds cooled on the nation’s reopening trades. His stake in more than tripled to 250,000 shares, worth $11 million, or 11% of his portfolio. He also doubled holdings in Alibaba to $10 million (read: 5 China ETFs to Tap as Economy Recovers).

KraneShares CSI China Internet ETF (KWEB - Free Report) seems to be the perfect pick. It tracks the CSI Overseas China Internet Index, which consists of China-based companies whose primary business, or businesses, is focused on Internet and Internet-related technology.

Artificial Intelligence Boom

Billionaires Stanley Druckenmiller and David Tepper loaded up on stocks benefiting from the artificial intelligence (AI) boom during the first quarter. Druckenmiller increased his stake in Nvidia Corp (NVDA) by more than 208,000 shares and made a new investment worth $210 million in Microsoft (MSFT), signaling a big push into AI-related stocks, according to the 13F filing.

Druckenmiller highlighted AI as a game-changing technology during the 2023 Sohn Investment Conference. Both Nvidia and Microsoft have dominated the AI scene this year, with the chipmaker earning a title as the "leading silicon AI enabler," while the latter fueled the hype around artificial intelligence with a $10 billion investment in OpenAI — the firm behind the viral large language tool, ChatGPT (read: AI Stocks & ETFs Surge Amid ChatGPT Frenzy).

On the other hand, David Tepper added a new position in Nvidia, buying 150,000 shares with a market value of approximately $41.7 million. He also bought 500,000 new shares of Cathy Wood’s ARK Innovation ETF, which invests in companies that create disruptive technologies.

Global X Robotics & Artificial Intelligence ETF (BOTZ - Free Report) is the most popular play in the AI space. It seeks to invest in companies that potentially stand to benefit from increased adoption and utilization of robotics and AI, including those involved with industrial robotics and automation, non-industrial robots, and autonomous vehicles.

Bet on Chip Stocks

Druckenmiller is also betting big on chip stocks and pumped up three companies in particular. He bought 2.46 million shares of Intel Corp. (INTC), 2.19 million shares of Micron Technology (MU) and about 411,000 shares of Qualcomm Inc. (QCOM) during the first quarter. Overall, the hedge fund invested close to $274 million in semiconductor stocks. Among the few ETFs targeting the semiconductor sector, VanEck Vectors Semiconductor ETF (SMH - Free Report) and iShares Semiconductor ETF (SOXX - Free Report) are the popular ones. SMH has a Zacks ETF Rank #2 (Buy) and SOXX has a Zacks ETF Rank #3 (Hold).

Consumer Discretionary Looks Bright

Another billionaire investor Bill Ackman bought up a significant number of shares in the consumer discretionary sector over the last quarter, indicating that he still believes in the U.S. economy growing stronger. Topping the list was Lowe’s Companies (LOW), which now makes up for a substantial 19.6% of Ackman’s portfolio. Chipotle Mexican Grill (CMG) is in second place, accounting for an impressive 17.2% share. Ackman also raised his stake in Restaurant Brands International (QSR) — the parent company of Burger King, Tim Hortons and Popeyes (read: Inflation Drops Below 5% Since 2022: ETFs Set to Gain).

Zacks ETF Rank #1 Vanguard Consumer Discretionary ETF (VCR - Free Report) and Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) , which offer broad exposure to the sector, appear as intriguing choices.

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