What S&P 500 ETF does Warren Buffett recommend?
The two investments held in Berkshire Hathaway's portfolio that Buffett recommends more than anything else are two S&P 500 index funds. The SPDR S&P 500 ETF Trust (NYSEMKT: SPY) and the Vanguard S&P 500 ETF (NYSEMKT: VOO).
| ETF | Ticker | Annualized 5-year return |
|---|---|---|
| Vanguard S&P 500 ETF | VOO | 14.72% |
| iShares Core S&P 500 ETF | IVV | 14.27% |
| SPDR S&P 500 ETF Trust | SPY | 14.14% |
Instead, he has consistently told investors to buy an S&P 500 index fund. "I recommend the S&P 500 index fund, and have for a long, long time to people. And I've never recommended Berkshire to anybody," Buffett said at Berkshire's annual shareholder meeting in 2021.
Regardless of how well or poorly the U.S. economy and stock market are performing, Warren Buffett buying back shares of his favorite stock, Berkshire Hathaway, is a virtual given.
Key Points. Warren Buffett is highly regarded for his ability to consistently beat the benchmark S&P 500. Berkshire Hathaway's investing profile has dramatically changed since the turn of the century, however. As a result, growth investors will likely be better served owning this low-cost indexed Vanguard ETF.
The Vanguard S&P 500 ETF (VOO 0.96%) is one of the most popular investment options for index investors. And with good reason. Its low expense ratio and strong track record of tracking the index make it a great option for those simply looking to match the S&P 500.
| Symbol | Name | 5-Year Return |
|---|---|---|
| ITB | iShares U.S. Home Construction ETF | 26.46% |
| XLK | Technology Select Sector SPDR Fund | 25.52% |
| FTXL | First Trust Nasdaq Semiconductor ETF | 24.89% |
| XSD | SPDR S&P Semiconductor ETF | 24.83% |
| Company | Shares held | Holding value |
|---|---|---|
| Vanguard S&P 500 ETF (VOO) | 43,000 | $18,782,400 |
| SPDR S&P 500 Trust ETF (SPY) | 39,400 | $18,727,214 |
| Jefferies (JEF) | 433,558 | $17,520,079 |
| Liberty Latin Americ Class C (LILAK) | 1,284,020 | $9,424,707 |
Warren Buffett has long recommended the S&P 500 index fund and ETF, and through his holding company Berkshire Hathaway, he also owns two of these types of investments: the Vanguard S&P 500 ETF (NYSEMKT: VOO) and the SPDR S&P 500 ETF Trust (NYSEMKT: SPY).
At its core, Warren Buffett's investing strategy is not all that complicated: Buy businesses, not stocks. In other words, think like a business owner, not someone who owns a piece of paper (or these days, a digital trade confirmation).
What 4 stocks are in Warren Buffett's portfolio?
Top Warren Buffett Stocks By Size
Coca-Cola (KO), 400 million. Kraft Heinz (KHC), 325.6 million. Occidental Petroleum (OXY), 248.1 million. American Express (AXP), 151.6 million.
Unable to bear the bureaucracy. According to Warren's own confession, his key weakness is the lack of patience when it comes to bureaucratic issues.
"Warren Buffett Makes Over $120 Billion on Apple's Rise to $3 Trillion, Among His Best Bets Ever." CNBC. "Everything Warren Buffett and Charlie Munger Said at the 2023 Annual Meeting." Berkshire Hathaway.
Long-term performance means sticking around
That's pretty impressive, but if you add dividends into the equation, the numbers are a lot less compelling. Berkshire Hathaway doesn't pay dividends, so its return remains at 215%. But if you reinvested dividends into the S&P 500, your total return would be about 205%.
Vanguard S&P 500 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOO is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market.
Class A shares will typically grant more voting rights than other classes. This difference is often only pertinent for shareholders who take an active role in the company. Nevertheless, because of the voting rights, A-shares are often more valuable than B shares.
VOO's top 3 holdings are MSFT, AAPL, NVDA. ETF VOO's is holdings 505 different assets. ETF VOO's total assets are 416.58B.
If you buy directly through Vanguard, you may benefit from lower fees, better customer service, and additional product research. Buying a Vanguard fund through a broker may involve commissions, loads, or other charges that are imposed by the broker, and not Vanguard directly—although this is not always the case.
VOO-Vanguard S&P 500 ETF.
Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification.
Which fund has the highest 10 year return?
Morningstar Direct ranked the funds in terms of their 10-year annualized returns, as measured on a specific date (as opposed to the end of the month) — in this case, Oct. 19, 2023. No. 1 on the list is the ProFunds Semiconductor UltraSector Fund, which yielded 29.21% over the past decade.
| ETF | Assets | Expense ratio |
|---|---|---|
| Schwab U.S. Small-Cap ETF (SCHA) | $16 billion | 0.04% |
| Invesco QQQ Trust (QQQ) | $249 billion | 0.20% |
| Vanguard High Dividend Yield Index ETF (VYM) | $51 billion | 0.06% |
| Vanguard Total International Stock ETF (VXUS) | $63 billion | 0.07% |
An effortless way to build wealth
He does own two ETFs, though, both of which are S&P 500 ETFs: the Vanguard S&P 500 ETF (NYSEMKT: VOO) and the SPDR S&P 500 ETF Trust (NYSEMKT: SPY).
Berkshire owns shares in two prominent S&P 500 funds, but they're far from the only ones on the market. Each one you come across will give you roughly the same exposure and roughly the same returns. The major differentiator is cost. Take the two funds in Buffett's portfolio.
- U.S. Treasury bills ($5.8 billion) Buffett added about $5.8 billion in U.S. Treasury bills to the massive stockpile Berkshire holds, bringing the total to $133.4 billion. ...
- Mystery stock (about $3.6 billion) ...
- Berkshire Hathaway ($2.1 billion)
