Warren Buffett: A History of Investing and Copycat ETFs

Considered by many as the world’s greatest investor—not to mention the most famous and trusted—Warren Buffett has embraced ETFs over the years as key parts of Berkshire Hathaway Corp.’s (BRK.B) profit engine.

Berkshire and its subsidiaries relied on broad index exchange-traded funds like the Vanguard S&P 500 ETF (VOO) and the SPDR S&P 500 ETF Trust (SPY), which provided exposure to a market that rose more than tenfold over the past 25 years.  

Buffett Announces Retirement

The 94-year-old, who announced this weekend he’s retiring from Berkshire after 60 years, has also inspired a range of ETFs that aim to copy his value investing style, including the VistaShares Target 15 Berkshire Select Income ETF (OMAH), which launched in March.  

With a long history of investing in ETFs, the fact that Omaha, Nebraska-based Berkshire owned none as of the end of 2024 may be surprising. To be sure, at least one of Berkshire’s subsidiaries, New England Asset Management, held ETFs, including the PGIM Ultra Short Bond ETF (PULS), the VanEck Fallen Angel High Yield Bond ETF (ANGL) and a half-dozen of BlackRock Inc.'s (BLK) iShares equity ETFs, according to an SEC filing.  

Still, it looks like he was a step ahead of the rest of the investing world: Buffett liquidated equity holdings and moved into cash after the S&P 500's more than 50% jump over two years, likely anticipating a 4.3% total return decline in that index during the first quarter.

Buffett: Stick to Index Funds

Whether or not Buffett and Berkshire hold ETFs at the moment wasn’t discernible from SEC filings, as those showing funds held at quarter’s end haven’t yet been filed.

Still, Buffett will continue using them even after he departs, not just the company but his mortal coil. His will instructs that 90% of the money left to his widow be invested in an S&P 500 index fund and 10% in short-term government bond funds, according to an X post from Bloomberg Senior ETF Analyst Eric Balchunas.

“I continue to advise investors to buy an S&P 500 index fund and not to try to pick specialty ETFs on index funds,” Buffett emailed Balchunas as part of comments that were included in Balchunas’s book, "The Bogle Effect: How John Bogle and Vanguard Turned Wall Street Inside Out and Saved Investors Trillions" (2022 Matt Holt Books).

“If index funds continue to grow, there will be public policy issues down the line, but that’s a subject for another day,” he continued.