Bloomberg Professional Services
This article was written by Mike Pruzinsky, Equity Index Product Manager at Bloomberg.
Billionaires don’t chase trends. They move early, think long-term, and invest with conviction, often supported by deep research, direct access to company leadership, and teams of analysts. These elite investors are known for identifying opportunities before they become mainstream and weathering volatility without panic.
Historically, capturing the strategic signals behind billionaire portfolios meant combing through company filings, interpreting headlines, and trying to reconstruct intent from scattered data. It was labor-intensive, incomplete, and out of reach for most investors.
PRODUCT MENTIONS
Now, there’s a better way.
The Bloomberg US Billionaires Investment Select Index (BBIST Index) distills the collective public equity holdings of America’s most wealthy investors into a transparent, rules-based equity index. It’s designed to mirror their shared conviction and offer a smarter signal for long-term investment allocation.
As the wisdom of the crowd has shown, a well-informed, diverse group of decision-makers can often outperform any individual expert. This index takes that idea a step further by focusing not on retail investors or sentiment-driven traders, but on a uniquely qualified crowd: U.S. billionaires with publicly documented successful investment histories.
What makes the Bloomberg US Billionaires Investment Select Index different?
Traditional equity benchmarks tend to follow strict market-cap-weighted rules, giving the most exposure to the largest companies in the market. That structure rewards scale, not insight. The Bloomberg US Billionaires Investment Select Index turns the model upside down. It uses proprietary data compiled by Bloomberg News (with additional data available on the Terminal using the RICH <GO> function) to track billionaire net worth and to identify who is making the investments. Note: Bloomberg Index Services Limited (“BISL”) utilizes billionaire net worth analysis and net worth confidence scores published by Bloomberg News.
Then it aggregates their public equity holdings to determine where they’re deploying capital. The result? A high-conviction, curated portfolio that reflects where elite investors see opportunity not just where the market has already priced it in.
The “Wisdom of the Wealthiest” in action
We call this principle the “Wisdom of the Wealthiest” – the idea that there’s insight to be gained by watching how the most sophisticated capital allocators move. This index captures a behavioral signal by offering an aggregated, high-quality view of what billionaire investors are doing with their portfolios and is grounded in academic literature1. It functions as a proxy for active intelligence by surfacing the views of “super-informed” billionaires before common themes and opportunities emerge as consensus.
It is worth mentioning that work by Lakonishok & Lee confirms insider outperformance and billionaires can function as “super-informed” investors with board-level relationships, institutional-quality due diligence, and strategic ownership that may influence company outcomes. In this context, an insider refers to a company officer, director, or major shareholder with authorized access to non-public information who actively trades the company’s stock.
This does not imply illegal activity but rather highlights the behavior of informed and experienced investors. The study shows that insiders often trade against prevailing market trends, and their purchases, particularly in smaller firms, can signal future stock performance.
Their collective portfolios reflect not just stock preferences but a nuanced understanding of global markets, corporate fundamentals, and emerging opportunities. In addition, an adjusted market capitalization with exponential weighting amplifies exposure to stocks held by multiple billionaires, reflecting cross-validation among elite investors.
Performance backed by discipline
Over the past five years, the Bloomberg Billionaires Index has historically demonstrated:
- Competitive total returns vs. traditional market benchmarks
- Reduced exposure to overvalued or speculative names
- Dynamic sector shifts aligned with evolving billionaire convictions
This combination of return potential and disciplined composition makes it especially relevant for investors focused on growth with a long-term investment horizon.
Unlike traditional smart beta strategies that rely on outperforming by tilting to specific investment factors, the Bloomberg US Billionaires Investment Select Index adjusts dynamically based on real investor behavior. And most importantly: it resonates. When one hears that this index follows the ‘smart money’ of billionaires and other legendary investors, it creates an instant understanding and trust.
When evaluating index performance, absolute return only tells part of the story. Sharpe ratio, a measure of risk-adjusted return, reveals how efficiently a portfolio compensates investors for the volatility they take on. And over the past ten years, the Bloomberg US Billionaires Investment Select Index has historically delivered superior Sharpe ratios relative to the Bloomberg United Stated Large, Mid, & Small Cap Index (USLST), making it a compelling strategy for allocators.
Final thought: A smart investment signal
The “Wisdom of the Wealthiest” isn’t just a catchy phrase, but it’s the blueprint for a modern index that combines Bloomberg’s proprietary data, systematic design, and real-world investor behavior. In a market crowded with broad benchmarks and passive products, the Bloomberg Billionaires Index delivers a compelling alternative: one that is informed, dynamic, and deeply grounded in the strategies of the world’s most successful investors.
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