Who doesn’t want to be rich and famous like Warren Buffett, especially after his
Berkshire Hathaway Inc. BRK-A has added an impressive 25.7% so far this year (as of December 21, 2016) and traded above $250,000 for the first time in mid December. After all, this Wall Street guru successfully put his money in the right place and continued to reap huge returns. Furthermore, Berkshire Hathaway has added more than 116% over the last five years that is better than the gain of about 80% from the broader market ETF SPDR S&P 500 ETF ( SPY - Free Report) during the same timeframe (read: S&P 500 On A Bull Run: Bet on Leveraged ETFs for 2017). Why Such a Surge
Investors should note that Trump rally had a lot to do with Berkshire Hathaway’s success. In the last one month (as of December 21, 2016), the stock was up over 4.5%. As the Trump rally pushed up bond yields, financial stocks gained strength, benefiting Buffett’s bank-heavy
portfolio (read: Play Banking Bonanza with These ETFs in Trump World).
He also had considerable holdings in industrial stocks like General Electric Company. And Trump’s promise to boost infrastructure spending and the resultant boost in industrial stocks are by now known to all. In fact, Buffett had positions in several other currently-soaring corners of industry – like
energy and railroads – that took Berkshire Hathaway to its recent height (read: How to Bet on Oil with Leveraged ETFs).
Want to Build Your Portfolio Like Buffett’s Basket?
Thanks to this feat, following billionaires like Buffett’s investment strategies has become a fad. While investing in Berkshire is always a good way of following Buffett, who is commonly known as The Oracle of Omaha, there are numerous other ways to imitate this stock market veteran’s investment theme and add spark to one’s portfolio.
Below we highlight a few ETF options that could lead to have a Buffett or Billionaire-like portfolio.
Direxion iBillionaire ETF
The fund looks to track the iBillionaire Index. Stocks are selected based on
highest allocations by 5-10 billionaires. Consumer Discretionary (24.56%), Health Care (24.02%) and IT (22.73%) are the three top sectors of the fund while Alphabet (7.3%), Activision Blizzard (4.1%) and Amazon.com (3.99%) are the top three holdings. The fund charges 65 bps in fees. Validea Market Legends ETF ( VALX - Free Report)
The actively managed ETF invests in equity securities chosen by the Validea Capital's proprietary investment system. With this method, investment strategies of Wall Street legends are replicated. The 100-stock fund charges 79 bps in fees.
Guru Index ETF ( GURU - Free Report)
The 49-stock fund looks to generate alpha over the broad market by investing in
highest conviction ideas of some erudite hedge funds. The fund charges 75 bps in fees. No stock accounts for more than 2.37% of the basket. Goldman Sachs Hedge Industry VIP ETF ( GVIP - Free Report)
The fund looks to track the GS Hedge Fund VIP index. As per
Goldman, the index looks to track fundamentally driven hedge fund managers’ “Very-Important-Positions,” which appear most frequently among their top 10 long equity holdings. IT, financials and consumer discretionary take double-digit positions in the fund. The fund invests about 22.5% of its assets in the top 10 holdings. Guggenheim Dow Jones Industrial Average Dividend ETF ( DJD - Free Report)
The fund gives exposure to several of the Buffett’s holdings, namely Verizon, IBM, Goldman Sachs, Coca-Cola and Wal Mart. Plus, Dow Jones has proved to be a huge Trump beneficiary. The Zacks Rank #2 (Buy) fund charges 30 bps in fees (read:
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