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ETFs for Your Inner Icahn


The ETFs to be like Warren Buffett story has been written only about 37 million times, or once for every dollar the Oracle of Omaha made per day last year. Now it is Carl Icahn’s turns.

First, an important disclaimer. The Buffett/ETF story practically writes itself. Berkshire Hathaway (BRK-A) has an expansive list of equity holdings, meaning a Buffet/ETF story can feature dozens of sector ETFs.

As an activist investor, Icahn’s holdings do not rival Buffett’s in sheer number. In turn, that reduces the number of ETFs that can be considered legitimate “Icahn ETFs.”

The PowerShares NASDAQ Internet Portfolio (PNQI) is one credible ETF investors can use to unleash their inner Icahn. PNQI, one of 2013’s best non-leveraged ETFs, features eBay (EBAY), a new Icahn holding, and Netflix (NFLX) among its top-10 holdings. [Another View on Internet ETFs]

To be precise, eBay and Netflix are PNQI’s third- and eighth-largest holdings respectively, combining for 11.44% of the ETF’s weight. It is a stretch, but PNQI also has a 0.51% allocation to WebMD (WBMD), a former Icahn holding.

A broader Icahn ETF is the PowerShares QQQ (QQQ) , the NASDAQ  100 tracking ETF allocates about 2.2% of its weight to eBay and Netflix. More importantly, QQQ has an almost 12.2% stake in Apple (AAPL), one of the apples of Icahn’s eyes. In fact, based on that QQQ’s 12.16% stake in Apple and its $44.1 billion in assets under management, the ETF is a larger Apple shareholder than Icahn is. [Nasdaq Sets Its Sights on 5,000]

ETFs that have the potential to be secondary Icahn plays include the PowerShares Buyback Achievers Portfolio (PKW) . Apple is in the midst of a massive share repurchase program, one that Icahn wants to see increased and PKW rebalances this month. That means there is a chance Apple will meet the NASDAQ US Buyback Achievers Index’s entry requirement of a net reduction in shares outstanding of 5% or more in the trailing 12 months.

Stretch plays include the Guggenheim Spin-Off ETF (CSD) or the First Trust US IPO Index Fund (FPX) , that is assuming Icahn is successful in forcing eBay to spin-off PayPal. Do not forget Twitter (TWTR). Icahn does not own in a stake the company, at least not yet, but he does use the social media outlet to his advantage . FPX has a small stake in Twitter while the Renaissance IPO ETF (NYSEArca: IPO) and the Global X Social Media Index ETF (SOCL) hold larger interests in the newly public social media firm.

PowerShares QQQ

Tom Lydon’s clients own shares of Apple and QQQ.