🎯Bill Ackman's ETF Playbook"

Welcome to another one of ETF UNO's Legendary Portfolio Series! As we kick off 2025, we're excited to bring you our newest edition, featuring Bill Ackman, the brilliant mind behind Pershing Square Capital Management.

At just 58, Ackman is the youngest legend featured in our series so far. He burst onto the Wall Street scene in the 1990s and quickly made a name for himself with his bold investment choices and activist approach. Whether you know him from his legendary short position against Herbalife, his successful turnaround of Canadian Pacific Railway, or his prescient pandemic trades in 2020, one thing's for sure – Ackman knows how to make waves in the market.

Understanding Ackman's Investment Philosophy🧠

What makes Ackman's investment style unique? Here are the key characteristics that have defined his approach:

• Concentrated Positions: Unlike many fund managers who diversify across hundreds of positions, Ackman typically maintains a highly concentrated portfolio of 8-12 companies. He believes in putting significant capital behind his highest-conviction ideas.

• Activist Investing: Ackman is renowned for his activist investing style. He often takes large stakes in underperforming companies and then pushes for significant changes, such as board replacements, strategic overhauls, or even outright sales.

• Event-Driven: A significant portion of his returns stems from event-driven situations, such as mergers and acquisitions, spin-offs, and restructurings.

• Long-Term Horizon: Despite his activist reputation, Ackman is a patient investor who often holds positions for several years, allowing his investment theses to play out.

• Sector Focus: He favours consumer businesses, real estate, and financial services, sectors he understands deeply and that offer structural advantages.

The Ackman-Inspired ETF Portfolio🔥

Let's explore the ETFs that would align with Ackman's investment philosophy if he were limited to ETF investing. Remember, while Ackman focuses on individual stocks, these ETFs capture the essence of his investment style.

1. AdvisorShares Restaurant ETF (EATZ)

Ackman is particularly knowledgeable about the restaurant sector, as shown by his successful investments in Chipotle and Restaurant Brands International. EATZ provides focused exposure to this sector, including quick-service and full-service restaurant operators with strong brand recognition.

2. Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RSPD)

Ackman has consistently demonstrated his ability to identify consumer discretionary businesses with pricing power and strong market positions. RCD offers broad exposure to consumer discretionary companies while using equal weighting to reduce concentration risk – a slight deviation from Ackman's style but necessary in the ETF format.

3. iShares U.S. Real Estate ETF (IYR)

Ackman is strongly connected to real estate, especially after his legendary investment in General Growth Properties during the financial crisis. The IYR fund provides broad exposure to REITs and other real estate companies, allowing investors to access this familiar sector.

4. Financial Select Sector SPDR Fund (XLF)

Ackman has deeply understood financial institutions and their complex business models throughout his career. XLF offers exposure to a diverse range of financial services companies, from banks to insurance providers – the types of businesses where Ackman has previously found success.

5. ProShares UltraPro S&P 500 (UPRO)

UPRO's 3x leverage on the S&P 500 provides a way to express high conviction in the broader market—something Ackman has historically demonstrated through his portfolio construction. While Ackman is known for his concentrated positions, he can't achieve the same concentration with ETFs, so we selected this one as the last one on this list.

🌟 From Activist to ETF Investor

What we've created here is more than just a collection of ETFs—it's a portfolio that captures the essence of Bill Ackman's investment philosophy while adapting it to the ETF format. We fully understand that the real Ackman would likely get rid of being restricted to ETFs (given his activist approach and concentrated holdings). This list allows regular investors to capture some of the themes and sectors where he's succeeded.

Remember, the beauty of ETF investing is that it allows us to learn from legendary investors like Ackman while maintaining diversification. Understanding how successful investors think can provide valuable insights for your strategy.

We're passionate about making ETF investing accessible and engaging for everyone. Follow us on social media and subscribe to our newsletter for regular updates, analysis, and legendary portfolio deep dives.

DISCLAIMER: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and consider consulting with a financial advisor before making investment decisions.