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Globe and Mail
27-05-2025
- Business
- Globe and Mail
Billionaires Are Buying an AI Index Fund That Could Turn $500 per Month Into $432,300
Institutional asset managers recently filed their latest Forms 13F, disclosures required by the SEC for anyone who owns at least $100 million in equity securities like stocks and index funds. Several hedge fund billionaires purchased the Invesco QQQ Trust (NASDAQ: QQQ) in the first quarter, as detailed below: Louis Bacon's Moore Capital Management purchased 31,000 shares. The Invesco QQQ Trust remains a relatively small position in the portfolio. Steven Cohen's Point72 Asset Management added 7,950 shares. The Invesco QQQ Trust remains a relatively small position in the portfolio. Ken Griffin's Citadel Advisors added 2.2 million shares. The Invesco QQQ Trust is now the third-largest position in the portfolio, excluding options. Israel Englander's Millennium Management added 474,300 shares. The Invesco QQQ Trust now ranks among the 25 largest positions in the portfolio, excluding options. Investors should know two things about the Invesco QQQ Trust. First, the index fund tracks 100 stocks in the Nasdaq Composite (NASDAQINDEX: ^IXIC), which dropped into market correction territory in the first quarter. Second, history says the index fund can turn $500 per month into $432,300 in 20 years. The Invesco QQQ Trust provides exposure to many technology companies likely to benefit from artificial intelligence The Nasdaq-100 tracks 100 of the largest companies listed on the Nasdaq Stock Exchange. The index is rebalanced quarterly and reconstituted annually. It excludes financial companies and is heavily weighted toward the technology sector. The Invesco QQQ Trust measures the performance of the Nasdaq-100. The 10 largest positions in the index fund are listed by weight below: Microsoft: 8.6% Nvidia: 8.2% Apple: 7.5% Amazon: 5.4% Alphabet: 4.9% Broadcom: 4.5% Meta Platforms: 3.5% Netflix: 3.2% Tesla: 3.1% Costco Wholesale: 2.8% Importantly, several companies listed above are likely to benefit from demand for artificial intelligence (AI) in the coming years. Microsoft, Amazon, and Alphabet are the three largest cloud computing platforms. Nvidia is the leading supplier of data center GPUs. Broadcom is the market leader in custom AI chips. Meta Platforms is using AI to improve engagement across its social media properties. And Tesla is developing robotaxis and autonomous humanoid robots. How the Invesco QQQ Trust can turn $500 per month into $432,300 The Invesco QQQ Trust advanced 1,250% during the last two decades, compounding at 13.9% annually. But if dividend payments are included, the index fund achieved a total return of 1,470%, increasing at 14.7% annually. Admittedly, anticipating an annual return of 14.7% may be overly optimistic. So, investors should introduce a margin of safety by assuming a more modest annual return of 12%. At that pace, $500 invested monthly in the Invesco QQQ Trust will be worth $105,200 in one decade and $432,300 in two decades. Importantly, some investors may wish to save more or less than $500 per month. The chart below details how different monthly contribution amounts will grow over time, assuming an annual return of 12%. Returns were determined using the compound interest calculator. Investors need two more pieces of information. First, the Invesco QQQ Trust has been very volatile throughout history because it is so heavily weighted toward the technology sector. In the last decade, the index fund fell more than 10% from its record high eight times, and it fell more than 20% from its record high four times. Second, the Invesco QQQ Trust has a modest expense ratio of 0.20%, so shareholders will pay $20 annually on every $10,000 invested in the index fund. Comparatively, the average expense ratio of U.S. index funds and mutual funds was 0.34% in 2024. Should you invest $1,000 in Invesco QQQ Trust right now? Before you buy stock in Invesco QQQ Trust, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Invesco QQQ Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor 's total average return is957% — a market-crushing outperformance compared to167%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon, Nvidia, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Costco Wholesale, Meta Platforms, Microsoft, Netflix, Nvidia, and Tesla. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Yahoo
27-05-2025
- Business
- Yahoo
Billionaires Are Buying an AI Index Fund That Could Turn $500 per Month Into $432,300
In the first quarter, several hedge fund billionaires bought shares of the Invesco QQQ Trust, an index fund that provides heavy exposure to technology stocks. The Invesco QQQ Trust returned 14.7% annually in the last two decades, but even a more modest performance could turn $500 per month into $432,300 over the same period. The Invesco QQQ Trust has historically been a very volatile investment; it fell more than 10% from a record high eight times in the last decade. 10 stocks we like better than Invesco QQQ Trust › Institutional asset managers recently filed their latest Forms 13F, disclosures required by the SEC for anyone who owns at least $100 million in equity securities like stocks and index funds. Several hedge fund billionaires purchased the Invesco QQQ Trust (NASDAQ: QQQ) in the first quarter, as detailed below: Louis Bacon's Moore Capital Management purchased 31,000 shares. The Invesco QQQ Trust remains a relatively small position in the portfolio. Steven Cohen's Point72 Asset Management added 7,950 shares. The Invesco QQQ Trust remains a relatively small position in the portfolio. Ken Griffin's Citadel Advisors added 2.2 million shares. The Invesco QQQ Trust is now the third-largest position in the portfolio, excluding options. Israel Englander's Millennium Management added 474,300 shares. The Invesco QQQ Trust now ranks among the 25 largest positions in the portfolio, excluding options. Investors should know two things about the Invesco QQQ Trust. First, the index fund tracks 100 stocks in the Nasdaq Composite (NASDAQINDEX: ^IXIC), which dropped into market correction territory in the first quarter. Second, history says the index fund can turn $500 per month into $432,300 in 20 years. The Nasdaq-100 tracks 100 of the largest companies listed on the Nasdaq Stock Exchange. The index is rebalanced quarterly and reconstituted annually. It excludes financial companies and is heavily weighted toward the technology sector. The Invesco QQQ Trust measures the performance of the Nasdaq-100. The 10 largest positions in the index fund are listed by weight below: Microsoft: 8.6% Nvidia: 8.2% Apple: 7.5% Amazon: 5.4% Alphabet: 4.9% Broadcom: 4.5% Meta Platforms: 3.5% Netflix: 3.2% Tesla: 3.1% Costco Wholesale: 2.8% Importantly, several companies listed above are likely to benefit from demand for artificial intelligence (AI) in the coming years. Microsoft, Amazon, and Alphabet are the three largest cloud computing platforms. Nvidia is the leading supplier of data center GPUs. Broadcom is the market leader in custom AI chips. Meta Platforms is using AI to improve engagement across its social media properties. And Tesla is developing robotaxis and autonomous humanoid robots. The Invesco QQQ Trust advanced 1,250% during the last two decades, compounding at 13.9% annually. But if dividend payments are included, the index fund achieved a total return of 1,470%, increasing at 14.7% annually. Admittedly, anticipating an annual return of 14.7% may be overly optimistic. So, investors should introduce a margin of safety by assuming a more modest annual return of 12%. At that pace, $500 invested monthly in the Invesco QQQ Trust will be worth $105,200 in one decade and $432,300 in two decades. Importantly, some investors may wish to save more or less than $500 per month. The chart below details how different monthly contribution amounts will grow over time, assuming an annual return of 12%. Holding Period $200 Per Month $400 Per Month $600 Per Month 10 Years $42,100 $84,200 $126,300 20 Years $172,900 $345,800 $518,700 Returns were determined using the compound interest calculator. Investors need two more pieces of information. First, the Invesco QQQ Trust has been very volatile throughout history because it is so heavily weighted toward the technology sector. In the last decade, the index fund fell more than 10% from its record high eight times, and it fell more than 20% from its record high four times. Second, the Invesco QQQ Trust has a modest expense ratio of 0.20%, so shareholders will pay $20 annually on every $10,000 invested in the index fund. Comparatively, the average expense ratio of U.S. index funds and mutual funds was 0.34% in 2024. Before you buy stock in Invesco QQQ Trust, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Invesco QQQ Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor's total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon, Nvidia, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Costco Wholesale, Meta Platforms, Microsoft, Netflix, Nvidia, and Tesla. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Billionaires Are Buying an AI Index Fund That Could Turn $500 per Month Into $432,300 was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20-05-2025
- Business
- Yahoo
Should You Follow These 2 Billionaire Hedge Fund Managers and Buy Bitcoin?
Two billionaire hedge fund managers made big additions to their Bitcoin positions in Q1 2025. Spot Bitcoin ETFs have become a valuable tool for adjusting Bitcoin allocations. For the typical investor, a 1% Bitcoin allocation is now considered reasonable. 10 stocks we like better than Bitcoin › Although Bitcoin (CRYPTO: BTC) is only up 11% for the year, it has regained some of its early-year momentum and is close to regaining its all-time high of $109,000 from January. Even the biggest crypto skeptics have to acknowledge that Bitcoin -- up almost 25% during the past 30 days -- is proving remarkably resilient in the face of continued macroeconomic uncertainty. So it's, perhaps, no surprise that some of the biggest hedge fund managers in the world are also turning their attention to Bitcoin. Based on recent Securities and Exchange Commission (SEC) Form 13F quarterly filings, it appears that two billionaire hedge fund managers -- Steven Cohen of 72Point Asset Management and Ken Griffin of Citadel Advisors -- are now loading up on Bitcoin. So should you be doing the same? By analyzing SEC filings, it is possible to get some tangible numbers on just how much Bitcoin these two billionaires are buying. What's interesting is that they are using the new spot Bitcoin ETFs -- and, specifically, the iShares Bitcoin Trust ETF (NASDAQ: IBIT) -- as their preferred way to get exposure to Bitcoin. For the quarter ended March 31, Cohen boosted the value of his iShares Bitcoin Trust ETF holdings to $198.9 million. He purchased 1.39 million new shares, and now owns 4.25 million, for an increase of 49%. During that same time period, Griffin boosted the value of his iShares Bitcoin Trust ETF holdings to $146.9 million. He purchased 2.08 million new shares, and now owns 3.14 million, for a head-spinning increase of 195%. Those might sound like staggering totals, but here's the thing: The sizes of these two hedge funds are so big that Bitcoin still accounts for less than 1% of their portfolios. In the case of Point72 Asset Management, this Bitcoin ETF position is 0.56% of the total portfolio. In the case of Citadel Advisors, the position is just 0.14% of the total portfolio. Although the SEC filings present a valuable view of what's happening with the holdings of these two billionaire hedge fund managers, it's still an incomplete view. It's just a snapshot in time, letting us know what happened during the first quarter of the year. While we really don't know the precise motivations of these two big-name investors, we can certainly speculate. In the first quarter of the year, Bitcoin was on yet another epic run. Pro-crypto euphoria was everywhere. On the day of the presidential inauguration, Bitcoin hit an all-time high of more than $109,000. So, obviously, Bitcoin seemed to possess a tremendous amount of upside potential for the year. Of course, it's also possible to speculate that these investors were buying Bitcoin as a hedge against macroeconomic and geopolitical uncertainty. After all, Bitcoin historically has had little correlation with any major asset class. That makes it a potential hedge against macroeconomic factors such as inflation, which was a major topic of discussion during the early part of the year. So it will be interesting to check out what happened to these Bitcoin positions over Q2. Did tariff uncertainty and Bitcoin's brief decline below the $75,000 mark lead them to dump their Bitcoin positions? Or, did fears of tariff-induced inflation and a potential recession lead them to load up on yet more Bitcoin as a hedge against a worst-case economic scenario? It's also important to point out that not all hedge fund managers are loading up on Bitcoin. If you take a look at a hedge fund database, search for holdings of the iShares Bitcoin Trust ETF, and then see who's buying and selling, a number of the top holders of this Bitcoin ETF were actually selling their positions. Much of this buying and selling is likely about getting the Bitcoin allocation right. Griffin, for example, had almost no exposure to Bitcoin heading into 2025. So, while a massive jump of 195% in exposure sounds impressive, his overall Bitcoin allocation is still minuscule. Somewhat surprisingly, it appears that top hedge fund managers are keeping their Bitcoin allocations under the 1% level. About a dozen or so hedge fund managers are now over 1% when it comes to their Bitcoin allocations, but nobody appears to be going all-in on Bitcoin. So, if you are allocating more than 1% of your portfolio to Bitcoin, you may be taking on too much risk. Even a 1% target allocation might be aggressive, depending on where you are in your investing career. That thinking squares up with what BlackRock (NYSE: BLK), the company behind the iShares Bitcoin Trust ETF, recently advised investors in a report ("Sizing Bitcoin in Portfolios"). It suggested that, for the typical investor, a Bitcoin allocation around 1% is "reasonable." With top billionaires adjusting their exposure to Bitcoin, smaller investor might consider doing so as well. Just remember, though, the overall diversification of your portfolio is much more important. There's room for Bitcoin in your portfolio, but it shouldn't be a disproportionate part of your holdings. Before you buy stock in Bitcoin, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Bitcoin wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!* Now, it's worth noting Stock Advisor's total average return is 975% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Dominic Basulto has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy. Should You Follow These 2 Billionaire Hedge Fund Managers and Buy Bitcoin? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
17-05-2025
- Business
- Miami Herald
America has officially lost its final AAA credit rating
Moody's has followed in the footsteps of credit rating agencies S&P Global and Fitch Ratings, downgrading their AAA rating on U.S. debt. The move comes amid ongoing challenges associated with mounting U.S. debt and little signs of significant debt reduction in Congress, despite recent actions from the Department of Government Efficiency, or DOGE. Related: Goldman Sachs revamps Fed interest rate cut, recession forecast Moody's decision to lower the U.S. credit rating to Aa1 follows similar decisions by Fitch Ratings in 2023 and S&P Global in 2011. It also adjusted its outlook to stable from negative to reflect the downgrade. "While we recognize the US's significant economic and financial strengths, we believe these no longer fully counterbalance the decline in fiscal metrics," said Moody's statement. The federal budget deficit totals nearly $2 trillion annually, accounting for over 6% of gross domestic product (GDP).The move isn't likely to have a big impact on debt markets, given Fitch and S&P Global's downgrades did little to slow down demand for Treasuries. The 10-Year Treasury Note currently yields 4.44%, up from 3.62% last September. Nevertheless, the downgrade reflects growing concern that sky high deficits and government spending will put upward pressure on Treasury yields, forcing rates on everything from credit cards to mortgages higher over time. Related: Billionaire Steven Cohen sends hard-nosed message on US economy, stocks Moody's decision coincides with President Trump's cornerstone tax and spending bill, which is currently under consideration by the House of Representatives. The bill extends President Trump's 2017 tax changes, while also including new provisions, such as increasing the Social Security income tax deduction and eliminating taxes on overtime and tips. While the bill is popular among many eager for additional tax relief, some GOP members have blocked the bill, hoping for steeper cost cuts to offset the tax breaks. In the crosshairs is Medicaid, which is already the subject of cost-cutting in the bill. The tax proposals could boost long-run GDP by 0.6% but reduce federal tax revenue by $4.1 trillion from 2025 through 2034, according to the non-partisan Tax Foundation. The proposed tax cuts boost deficits by $3.8 trillion over the same period, or by 1.1% of GDP. Five republicans voted against advancing the bill out of the Budget Committee and to the House floor for a vote. "Republicans MUST UNITE behind, 'THE ONE, BIG BEAUTIFUL BILL!'," wrote Trump in a post on Truth Social. "We don't need 'GRANDSTANDERS' in the Republican Party. STOP TALKING, AND GET IT DONE!" The Budget Committee plans to vote again on Sunday, May 18. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
16-05-2025
- Business
- Miami Herald
Goldman Sachs resets interest rate cut forecast, recession outlook
The economy is slowing, and everyone is wondering if this is a pause or something more ominous. Those who think the U.S. economy is simply taking a breather point to wages outpacing inflation, retail sales strength, and relatively low unemployment and inflation. Meanwhile, those who are worried we're entering stagflation or a looming recession point toward recent signs of job market weakness and the risk that tariffs reignite inflation, slowing spending, and sluggish consumer confidence. There's little question that debate has intensified following President Trump's tariff announcements this year. The tariffs have been harsher than many predicted, increasing the threat of inflation and sending stocks on a roller coaster ride. Related: Goldman Sachs announces major change to S&P 500 forecast Initially, the S&P 500 retreated 19%, nearly entering a bear market. However, a 90-day pause in many tariffs on April 9 rekindled optimism that cooler heads would prevail, kickstarting an eye-popping 23% rally in the benchmark index. The potential for trade deals to allow the U.S. economy to sidestep a recession got an additional boost when President Trump cut Chinese tariffs from 145% to 30% following what appear to be encouraging early trade talks last weekend. The shifting tariff landscape has led major Wall Street firms to recalibrate their outlooks for recession and potential Fed interest rate cuts, including Goldman Sachs, one of the most influential banks in the Federal Reserve's dual mandate is to encourage low unemployment and inflation, goals that often contradict one another. When the Fed raises rates, like in 2022 and 2023, it slows the economy, lowering inflation but causing unemployment. When it cuts rates, like last fall, it accelerates the economy, supporting jobs but increasing inflation. Related: Billionaire Steven Cohen sends hard-nosed message on US economy, stocks Of course, those shifts don't happen overnight. Changes in Fed monetary policy take time to work their way through an economy as big as the United States, and that means it can take many rate increases or decreases to have the desired effect on inflation or employment. Unfortunately, we see exactly that playing out in real time this year. Last year, the Fed reduced rates by 1%, cutting in September, November, and December. The cuts were in response to an uptick in unemployment, partly due to the Fed's prior rate hikes. In April, the unemployment rate was 4.2%, up from 3.4% in 2023, according to the BLS. Many assumed the Fed would continue easing rates this year to ensure employment remained strong, but inflation hasn't cooperated. The Consumer Price Index showed CPI up 2.3% year-over-year in April, down only slightly from inflation of 2.4% last September. The threat of tariffs boosting inflation later this year has led Fed Chairman Jerome Powell to press pause on additional interest rate cuts, awaiting more clarity on the inflation and jobs front. The uncertainty over inflation and how unemployment evolves this year has sparked concern that the economy could slow, job losses rise, and inflation increase, leading to stagflation that would put the Fed in a particularly tough spot. Those still hoping for Fed interest rate cuts this year were betting that stagflation and a potential recession would force the Fed to cut rates despite the risk of fanning inflation. However, while positive for the economy, trade progress has reset the risk of stagflation and recession, potentially derailing additional Fed interest rate cuts. Goldman Sachs isn't overly optimistic that interest rates will head lower anytime soon. After President Trump announced lowering tariffs on China, Goldman Sachs' analysts sent a note to clients saying they don't expect any cuts in 2025. More Experts: Treasury Secretary delivers optimistic message on trade war progressShark Tank's O'Leary sends strong message on economyBuffett's Berkshire has crucial advice for first-time homebuyers "The announcement of a 90-day pause in the retaliatory tariffs imposed in April, which will leave the US and China with 2025 tariff increases of +30pp and +15pp, respectively, is much better than we had expected," wrote the analysts. "Our team has raised their 2025 growth forecast by 0.5pp to 1% Q4/Q4 and reduced their 12-month recession odds to 35%." A lower chance of recession is good, but not necessarily for those in the "please cut interest rates" camp. "The Federal Reserve is likely to be less keen to cut interest rates," wrote the analysts. "Our economists now expect it to begin a series of three cuts later than they had previously expected." Goldman Sachs previously targeted rate cuts beginning again in July. Now, they're targeting December. They previously believed that rate cuts would happen at sequential meetings, but they think it's more likely that the Fed will implement any cuts at every other meeting instead. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
