Billionaire Ken Fisher’s Favorite ETFs

iShares MSCI Taiwan Index (ETF) (NYSEARCA:EWT)

– Shares Owned by Fisher Asset Management (as of September 30): 10.38 Million
– Value of Fisher Asset Management’s Holding (as of September 30): $163 Million

The iShares MSCI Taiwan Index (ETF) (NYSEARCA:EWT) follows the performance of the MSCI Taiwan IndexSM. This ETF focuses on capturing 85% of the total market capitalization value of the Taiwanese equity market. The ETF is up by 24% year-to-date and has total assets of $2.7 billion. Taiwan is one of the least volatile markets in Southeast Asia, as its economy is mainly based on high technology and remains immune to the vagaries of commodity prices which have rocked other Asian countries like Indonesia.

Thus, it is not surprising that the iShares MSCI Taiwan Index (ETF) (NYSEARCA:EWT) has 57% allocation towards the technology sector, given the large number of leading global technology companies based on this island. Taiwan is a leader in the production of LCDs, solar cells, semiconductors, and other electronics products. The largest holding in the ETF is Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM), with nearly 25% weight. Taiwan Semiconductor has been an extraordinary performer over the last few years and become the biggest semiconductor foundry maker in the world, almost single-handedly changing the entire electronics industry by pioneering the fabless business model.

While the value of holdings in the ETF among the hedge funds in our database appreciated by 91% to $365 million during the second quarter, the number of funds invested in it actually declined to six on June 30 from nine on March 31. Fisher Asset Management kept its stake largely unchanged during the third quarter, trimming it by 1%.

SPDR Nuveen Barclays Capital Municpl Bnd ETF (NYSEARCA:TFI)

– Shares Owned by Fisher Asset Management (as of September 30): 4.83 Million
– Value of Fisher Asset Management’s Holding (as of September 30): $241.84 Million

The SPDR Nuveen Barclays Capital Municpl Bnd ETF (NYSEARCA:TFI) follows the performance of the Barclays Capital Municipal Managed Money Index, which tracks the US long-term, tax-exempt bond market. These bonds are relatively safe, as they can be considered quasi-government securities. Municipal bonds are generally preferred because of their tax-free status and low default rates. The performance of the ETF has struggled recently, but holds 1% gains this year, as investors look to invest in higher-yielding yet safe securities. The ETF has a low net expense ratio of just 0.23% and an average coupon rate of 4.8% along with an average maturity of 13.6 years. California, New York and Texas are the top states in the portfolio, accounting for more than 49% of its value. Fisher Asset Management sold off 2% of its position in the SPDR Nuveen Barclays Capital Municpl Bnd ETF (NYSEARCA:TFI) during the third quarter.

SPDR Barclays Cptl Shrt Term Corp Bd ETF (NYSEARCA:SCPB)

– Shares Owned by Fisher Asset Management (as of September 30): 19 Million
– Value of Fisher Asset Management’s Holding (as of September 30): $584.60 Million

Lastly is the SPDR Barclays Cptl Shrt Term Corp Bd ETF (NYSEARCA:SCPB), which follows the Barclays Capital US 1-3 Year Corporate Bond Index that tracks the United States’ short-term corporate bond market. Corporate bonds have been doing well in the current low-interest-rate environment, as fixed income investors look for government bond alternatives which give a decent yield. As interest rates are expected to remain in a low range, this ETF should continue to perform well. The fund has an average coupon rate of 3.6% and average maturity of 1.9 years, with a gross expense ratio of just 0.12%. The largest exposure this ETF has is to the corporate industrial sector, with 51% weighting, closely followed by the corporate finance sector, which constitutes 42%.

The number of funds that we track with a position in this ETF increased by one to four in the June quarter, while the value of their holdings increased by 7% to $570 million quarter-over-quarter. Fisher Asset Management raised its stake in the SPDR Barclays Cptl Shrt Term Corp Bd ETF (NYSEARCA:SCPB) by 3% during the third quarter.

Disclosure: None