Nicholas Vardy

That's why, in 2014, I swapped some of the “Ivy Plus” Investment Program's index-tracking ETFs for the Global X Guru Index ETF (GURU), which tracks the favorite stock picks of the biggest hedge fund managers. GURU also is a current recommendation in my monthly newsletter,The Alpha Investor Letter.

All hedge funds with more than $100 million in U.S. equity investments are required to publish their holdings in a publicly available document called the 13F every quarter.

TheGlobal X Guru Index ETF (GURU)uses a proprietary methodology to compile the highest conviction ideas from a select pool of hedge funds where the 13F information is most valuable. It then invests in these ideas through the transparent, cost-efficient and easily accessible format of an ETF. The strategy rose 47.27% in 2013.

Critics suggest that 13F data is outdated, by definition, and offers investors no edge. That may be so. But cutting out the high fees of hedge funds, while getting some of their highest conviction ideas, is also a big edge. Although hindsight is always 20:20, take a look at the one-year charts of top three current stock picks in Global X Guru Index ETF (GURU)and decide for yourself.

1. NXP Semiconductors NV (NXPI)

Netherlands-based NXP Semiconductors invents, designs and manufactures high-performance, mixed-signal solutions for radio frequency, analog, power management, interface, security and digital processing. It counts Apple (AAPL) as one of its biggest customers.

NVXP has gained more than 76% over the past 12 months, and it is up over 20% in 2014. NXPI is currently trading at just 11.77 times forward earnings, while the stock is expected to grow by nearly 36% per year over the next five years. That puts its Price Earnings to Growth (PEG) ratio at a rock bottom 0.38., confirming that it trades at a very steep discount to its growth rate. Note the stock has a beta of 2.55, so it is far more volatile than the market.

2. Micron Technology Inc. (MU)

Micron Technology (MU) is also in the semiconductor space, with its main business products including DRAM, NAND flash and NOR flash memory. Its customers include companies in the computing, consumer, networking and automotive, industrial, embedded and mobile industries.

Micron has gained over 200% in the past 12 months, and it is up over 13% in 2014. Micron still looks cheap with the stock currently trading at a forward price-to-earnings (P/E) ratio of only 9.74, compared to 12.53 for Sandisk. The company expects further earnings growth going forward after its strategic acquisition of Elpida. The stock has a beta of 1.86.

3. Thermo Fisher Scientific, Inc. (TMO)

Thermo Fisher Scientific (TMO)provides analytical instruments, equipment, reagents and consumables, software and services for research, manufacture, analysis, discovery and diagnostics.

Thermo Fisher has gained over 69% in the past 12 months, and it is up over 10% in 2014. The Federal Trade Commission recently announced approval of TMO's $13.6 billion acquisition ofLife Technologies Corp (LIFE). The company also announced earnings of 1.43 cents per share (EPS) for the last quarter, beating consensus estimates. By taking into account the integration of the Life Technologies (LIFE)business in 2014, Thermo Fisher issued 2014 guidance for both revenues and earnings guidance that are well above current market expectations.

Goldman Sachs recently upgraded Thermo Fisher based on better-than-expected organic growth and earnings, improving end-markets, and valuation, and raised its price target to $153 from $114 -- about 24% above its current price. Thermo Fisher is also a current recommendation in my trading serviceBull Market Alert.

In case you missed it, I encourage you to read my e-letter column posted last week onEagle Daily Investorabouthow to profit from the surprisingly red hot initial public offering market. I also invite you to comment in the space provided below myEagle Daily Investorcommentary.

NOTE: Global Guru Capital is a Securities and Exchange Commission-registered investment adviser, and is not affiliated with Eagle Publishing.

Nicholas Vardy

Nicholas Vardy is currently editor of the monthly investment newsletter, The Alpha Investor Letter, which provides longer-term global investments. He also writes two weekly trading services, Triple Digit Trader and Bull Market Alert, which focus on making short-term profits in the hottest markets in the world.