Owning Warren Buffett’s Berkshire Hathaway With ETFs

Berkshire Hathaway Inc., run for decades by Warren Buffett and his late ex-partner Charlie Munger, might be the most unique stock in U.S. markets. 

While classified as a financial stock, a look at the company's filings and management’s commentary shows a business devoted to prudently managing capital. So, more like a money manager, except that its stock portfolio turns over very slowly, and many of its investments are in private companies.  

Berkshire also has periods such as this year when it accumulates a heavy cash stake. Despite that, the Berkshire Hathaway stock beats broader markets with the class A and B shares both up around 20%, better than the S&P 500's 15% gain as measured by the SPDR S&P 500 ETF Trust (SPY).

Performance that leads the pack is not unfamiliar territory for Berkshire. However, the gradual changing of the guard, the changes in the portfolio, and the ever-changing stock market prompts close attention for ETF investors who have a large stake in Berkshire Hathaway stock through funds they invest in. I found four that hold close to 10% or more of their portfolios in that stock, and they run the gamut from huge financial sector ETFs to an actively managed fund that is one of many longtime mutual funds now available in an ETF wrapper.

ETF With at Least 10% of Assets in Berkshire Hathaway

For instance, the iShares US Financial Services ETF (IYG) has a more than 15% allocation. That is part of a five-stock mix that accounts for about half the assets in that $1.35 billion fund.  

The Financial Select Sector SPDR ETF (XLF) and the iShares US Financials ETF (IYF) each owns more than 13%. And an active ETF, the Davis Select US Equity ETF (DUSA) has nearly 10% of its asset in the company led by the so-called Oracle of Omaha.

Despite a penchant for T-bills and a reduction in some long-term holdings during 2024, through last Friday, Berkshire stock is a winner for investors. It's gain beats all four of the ETFs mentioned above, which each fall into the 11%-15% range so far this year.  

This is one of many examples of how ETF investors can use these vehicles to own a piece of stocks they target, but without that single stock going it alone. The stock market has been considered a technology-laden success story, and Berkshire’s tech allocation has certainly played a role in its run this year. But the key takeaway for advisors and investors is that knowing what you own inside your ETFs, rather than just buying and holding them based on fund names, is a pro tip worth considering.