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Want To Invest Like Warren Buffett? These ETFs Can Help

By Investing.com (Tezcan Gecgil/Investing.com )ETFsAug 27, 2020 05:40AM ET
www.investing.com/analysis/what-warren-buffet-owns-and-how-to-gain-exposure-200535426
Want To Invest Like Warren Buffett? These ETFs Can Help
By Investing.com (Tezcan Gecgil/Investing.com )   |  Aug 27, 2020 05:40AM ET
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When Warren Buffett—one of the most successful market investors of all time and CEO and Chairman of Berkshire Hathaway—buys or sells shares, the investment community sits up and pays attention. Another way investors gain insight into Buffet's views on specific industries and the global economy: his annual shareholder letters where both strategy and holdings are addressed.

Here we'll breakdown how investors can add some of Buffett's current holdings to their portfolios:

Value Stocks And The Gold Surprise

In his twenties, Buffett worked for Benjamin Graham, widely regarded as the father of value investing. By 1963, Buffett became the single largest shareholder of Berkshire Hathaway (NYSE:BRKa), (NYSE:BRKb), a struggling textile manufacturer at the time. Over the decades, his team has turned it into a holding company with a $510 billion market capitalization.

Berkshire Hathaway B Weekly
Berkshire Hathaway B Weekly

Berkshire Hathaway's regular 13F filings with the Securities and Exchange Commission (SEC) detail its holdings. The most recent filing of Aug.14 showed that Berkshire Hathaway bought a 20.9 million-share stake in the Toronto, Canada-based mining group Barrick Gold (NYSE:GOLD), one of the largest gold miners globally.

Buffett’s move shocked Wall Street. The “Oracle of Omaha” as he's often known, has never before been a fan of gold. In his 2011-shareholder letter, Buffett detailed his negative view on investing in gold, citing its lack of utility and failure to provide income by way of interest or dividends.

It's unclear if Buffet's views on gold have fundamentally shifted or whether the new generation of investment managers at Berkshire Hathaway simply have a different take on the precious metal. Either way, Buffet generally favors:

“Investment in productive assets, whether businesses, farms or real estate. Ideally, these assets should have the ability in inflationary times to deliver output that will retain its purchasing-power value while requiring a minimum of new capital investment.”

For example, Berkshire Hathaway has been a long time holder of consumer goods staple Coca-Cola (NYSE:KO) and currently owns over 5% of tech giant Apple (NASDAQ:AAPL).

Apple Weekly
Apple Weekly

ETFs Offering Access

In addition to buying stocks of companies outright for a long-term portfolio, exchange-traded funds can also provide more diverse exposure.

Buying shares of Berkshire Hathaway would be one option. However, there are also three ETFs that hold BRK.B shares, including SPDR® Portfolio S&P 500 Value ETF (NYSE:SPYV)—covered here, the Financial Select Sector SPDR® Fund (NYSE:XLF)—covered here and Davis Select US Equity (NASDAQ:DUSA).

Looking for ETFs for Apple stock exposure over the new decade? iShares Core S&P Total US Stock Market ETF (NYSE:ITOT) — covered here, the Technology Select Sector SPDR® Fund (NYSE:XLK), Invesco S&P 500® Top 50 ETF (NYSE:XLG) and the iShares Global 100 ETF (NYSE:IOO).

Finally, those investors who also would like to buy gold or gold miners can consider the SPDR® Gold Shares Fund (NYSE:GLD) or SPDR Gold MiniShares (NYSE:GLDM), the VanEck Vectors Gold Miners ETF (NYSE:GDX) or the VanEck Vectors Junior Gold Miners ETF (NYSE:GDXJ)—all covered here.

However, traders who are planning to participate in the recent gold rush via investing in leveraged ETFs, such as the Direxion Daily Junior Gold Miners Index Bull 2X Shares (NYSE:JNUG)—covered here—would need to weigh the risks of directional bets via gearing.

Bottom Line

Analyzing trades by companies like Berkshire Hathaway may give a glimpse into how smart money is allocating capital in equity markets. Retail investors should do their research on individual stocks and ETFs before buying. In the coming quarters, as Berkshire Hathaway updates its holdings, we may revisit this topic to discuss what other appropriate ETFs.

Want To Invest Like Warren Buffett? These ETFs Can Help
 

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Want To Invest Like Warren Buffett? These ETFs Can Help

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Comments (6)
Alekos Diamantakis
Alekos Diamantakis Aug 27, 2020 12:04PM ET
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I would like to thank the author for this information.  Though, I am interested to know which is the source of this information, how sure are you that Buffet has actually invested in Gold mines etc? Please answer me this question.
Nurhan Gecgil
Nurhan Gecgil Aug 27, 2020 12:04PM ET
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Thank you for the comment. Please refer to the SEC 13F filing mentioned above (link in the article). It lists BH's holdings. GOLD stock is an addition in the past quarter. Regards
Jon Banjovi
Jon Banjovi Aug 27, 2020 12:02PM ET
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Thank you
Divyajeet Rtt
Divyajeet Rtt Aug 27, 2020 11:24AM ET
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in USA ETN AND ETFS are like scam , institutions delist them at very low price and nor etf and etn have any proxy vote. so save yourself from this scam. look around in news and find out within 2 years how many etn and etf are delisted and only causing loss to investors.
Stella Stella
Stella Stella Aug 27, 2020 11:24AM ET
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That is absolutely not true. I invest in ETFs and they are as profitable as any stock.
Miguel Villalobos
Miguel Villalobos Aug 27, 2020 11:24AM ET
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Granted there are some that have been dissolved but that isnt true of the vast majority of ETFs. You obviously had a bad experience with an ETN. ETFs are somenod the best vehicles for passive investors. Divyajeet you gambled on something and lost.
Henry Latourrette
Henry Latourrette Aug 27, 2020 11:22AM ET
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If you'd like to invest like Warren Buffet, why not just buy BRK.A or BRK.B? Nonetheless, I personally believe that BRK investing in gold or gold related stocks is only a hedged way of having cash.
Josh Modern
JoshModern Aug 27, 2020 8:16AM ET
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my apologies for other people on here who have yet to learn how to communicate respectfully. ignore Ian. the fact that BRK bought a gld miner says A LOT if "ears" are open.
ian manro
ian manro Aug 27, 2020 5:02AM ET
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Amazing how everyone repeats the same thing. Get one thing tight. Buffet has not bought any gold. It was inr of his managers who works for the firm who bought it. As you should know by now Buffet does not give tgrm advice on what to buy or not. Stop repeating nonesense you read on the web.
ian manro
ian manro Aug 27, 2020 5:02AM ET
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excuse the typos please
Rhuephus Phuche
BoojumSnark Aug 27, 2020 5:02AM ET
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well ... since you are on the internet, guess we just ignore your bs nonsense ...
 
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