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Billionaire investor Warren Buffett has turned a winner this year despite wild stock market gyrations. The world’s richest people including Elon Musk, Mark Zuckerberg and Jeff Bezos have seen their net worth nosediving in 2022 — except for Warren Buffett.
Per a Motley Fool article, due to an acquisition in 1998 of reinsurance company General Re, Buffett's company owns a specialty investment firm known as New England Asset Management (NEAM). Although Buffett isn't directly involved in NEAM's investment portfolio, the securities NEAM buys are, eventually, owned by Buffett's company.
Interestingly, majority of NEAM’s portfolio is concentrated on five stocks as of June-end, namely Apple (AAPL - Free Report) , U.S. Bancorp (USB), Bank of America (BAC), HP Inc. (HPQ) and Chevron Corporation (CVX), per the Motley Fool.
Against this backdrop, below we highlight a few ETF strategies that could be followed if you are a fan of Warren Buffet.
Apple: 47.24% of Invested Assets
Apple (AAPL - Free Report) is a key holding of Berkshire’s portfolio, making up more than 45% of Berkshire’s portfolio by market value. The Oracle of Omaha investor now owns over 5% of outstanding the Apple stock.
There is a set of consumers who always choose to buy Apple products irrespective of inflationary pressure. In 2017, Buffett indicated that the Apple stock is a buy candidate as consumers ‘want the product’ despite its prices.
This gives Apple the leeway to pass on the rising costs to consumers (which won’t hurt sales) due to sheer brand name. And Apple is now paying off to Buffett.
Despite massive tech crash due to big tech earnings woes and rising rates, Apple has lost the least (down 6.4%) past month among famous FAAMG group. Facebook or Meta lost 9.7% past month, Alphabet (GOOG) is off 14.5%, Microsoft has shed about 9.4% and Amazon retreated 24.7% past month.
Plus, Information Technology business normally does not require recurrent capital investments, which makes it an inflation-friendly investment. Hence, one can bet on Apple ETFs like Technology Select Sector SPDR Fund (XLK - Free Report) , Fidelity MSCI Information Technology Index ETF (FTEC - Free Report) and Vanguard Information Technology ETF (VGT).
U.S. Bancorp: 13.76% of Invested Assets
Warren Buffett is a big fan of bank stock. Regional bank U.S. BancorpUSB make up about 13.8% of invested assets at the end of June and has been a continuous holding in NEAM's portfolio for more than two decades. USB is up 4.6% past month.
The company has a decent earnings surprise history. The company’s strong loan and deposit balances are positives. U.S. Bancorp’s decent liquidity position is likely to support capital-deployment plans. USB has about 11% exposure to iShares U.S. Regional Banks ETF (IAT - Free Report) and 7.7% focus on Invesco KBW Bank ETF (KBWB - Free Report) .
Bank of America: 11.96% of Invested Assets
Yet another big holding of NEAM is Bank of America BAC, which Berkshire Hathaway also bets big on. Bank of America's third-quarter 2022 results were primarily aided by higher rates and loan growth. The opening of new financial centers, enhancement in digital capabilities and cost-saving efforts are expected to keep aiding the company’s financials. Bank of America has 8.92% exposure Invesco KBW Bank ETF (KBWB - Free Report) and 7.36% focus on iShares U.S. Financial Services ETF (IYG - Free Report) .
HP: 9.12% of Invested Assets
Like Buffett, New England Asset Management's investment team is also charmed by with HP's HPQ capital return program. The company increased its base annual payout by 29% in 2021, and has been aggressively repurchasing its common stock. HP has 10.97% exposure to Invesco S&P SmallCap Energy ETF (PSCE - Free Report) .
Chevron: 5.26% of Invested Assets
The energy supermajor is considered one of the best placed integrated oil firms to achieve sustainable production growth, thanks to its premier position in the lucrative Permian Basin. Chevron’s CVX Noble Energy takeover expanded its footprint in the region and the DJ Basin along with the addition of cash generating offshore assets in Israel. In shareholder friendly moves, the integrated major recently hiked its dividend and boosted the stock repurchase program. Considering all of these factors, Wall Street expects the company’s EPS to grow 132.8% this year.
Chevron has 19.48% exposure to Energy Select Sector SPDR Fund (XLE - Free Report) and 16.75% focus on iShares U.S. Energy ETF (IYE - Free Report) .
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Bet on These Equity ETFs to Follow Warren Buffett
Billionaire investor Warren Buffett has turned a winner this year despite wild stock market gyrations. The world’s richest people including Elon Musk, Mark Zuckerberg and Jeff Bezos have seen their net worth nosediving in 2022 — except for Warren Buffett.
Per a Motley Fool article, due to an acquisition in 1998 of reinsurance company General Re, Buffett's company owns a specialty investment firm known as New England Asset Management (NEAM). Although Buffett isn't directly involved in NEAM's investment portfolio, the securities NEAM buys are, eventually, owned by Buffett's company.
Interestingly, majority of NEAM’s portfolio is concentrated on five stocks as of June-end, namely Apple (AAPL - Free Report) , U.S. Bancorp (USB), Bank of America (BAC), HP Inc. (HPQ) and Chevron Corporation (CVX), per the Motley Fool.
Against this backdrop, below we highlight a few ETF strategies that could be followed if you are a fan of Warren Buffet.
Apple: 47.24% of Invested Assets
Apple (AAPL - Free Report) is a key holding of Berkshire’s portfolio, making up more than 45% of Berkshire’s portfolio by market value. The Oracle of Omaha investor now owns over 5% of outstanding the Apple stock.
There is a set of consumers who always choose to buy Apple products irrespective of inflationary pressure. In 2017, Buffett indicated that the Apple stock is a buy candidate as consumers ‘want the product’ despite its prices.
This gives Apple the leeway to pass on the rising costs to consumers (which won’t hurt sales) due to sheer brand name. And Apple is now paying off to Buffett.
Despite massive tech crash due to big tech earnings woes and rising rates, Apple has lost the least (down 6.4%) past month among famous FAAMG group. Facebook or Meta lost 9.7% past month, Alphabet (GOOG) is off 14.5%, Microsoft has shed about 9.4% and Amazon retreated 24.7% past month.
Plus, Information Technology business normally does not require recurrent capital investments, which makes it an inflation-friendly investment. Hence, one can bet on Apple ETFs like Technology Select Sector SPDR Fund (XLK - Free Report) , Fidelity MSCI Information Technology Index ETF (FTEC - Free Report) and Vanguard Information Technology ETF (VGT).
U.S. Bancorp: 13.76% of Invested Assets
Warren Buffett is a big fan of bank stock. Regional bank U.S. Bancorp USB make up about 13.8% of invested assets at the end of June and has been a continuous holding in NEAM's portfolio for more than two decades. USB is up 4.6% past month.
The company has a decent earnings surprise history. The company’s strong loan and deposit balances are positives. U.S. Bancorp’s decent liquidity position is likely to support capital-deployment plans. USB has about 11% exposure to iShares U.S. Regional Banks ETF (IAT - Free Report) and 7.7% focus on Invesco KBW Bank ETF (KBWB - Free Report) .
Bank of America: 11.96% of Invested Assets
Yet another big holding of NEAM is Bank of America BAC, which Berkshire Hathaway also bets big on. Bank of America's third-quarter 2022 results were primarily aided by higher rates and loan growth. The opening of new financial centers, enhancement in digital capabilities and cost-saving efforts are expected to keep aiding the company’s financials. Bank of America has 8.92% exposure Invesco KBW Bank ETF (KBWB - Free Report) and 7.36% focus on iShares U.S. Financial Services ETF (IYG - Free Report) .
HP: 9.12% of Invested Assets
Like Buffett, New England Asset Management's investment team is also charmed by with HP's HPQ capital return program. The company increased its base annual payout by 29% in 2021, and has been aggressively repurchasing its common stock. HP has 10.97% exposure to Invesco S&P SmallCap Energy ETF (PSCE - Free Report) .
Chevron: 5.26% of Invested Assets
The energy supermajor is considered one of the best placed integrated oil firms to achieve sustainable production growth, thanks to its premier position in the lucrative Permian Basin. Chevron’s CVX Noble Energy takeover expanded its footprint in the region and the DJ Basin along with the addition of cash generating offshore assets in Israel. In shareholder friendly moves, the integrated major recently hiked its dividend and boosted the stock repurchase program. Considering all of these factors, Wall Street expects the company’s EPS to grow 132.8% this year.
Chevron has 19.48% exposure to Energy Select Sector SPDR Fund (XLE - Free Report) and 16.75% focus on iShares U.S. Energy ETF (IYE - Free Report) .