ETFs
Warren Buffett’s Favorite ETFs | Fox Business
Alli McCartney, managing director of UBS Private Wealth Management, discusses the impact of geopolitical tensions on the market on “Making Money.”
For investors looking for a simple, cost-effective way to invest in the index, they may want to follow Warren Buffett’s lead.
THE S&P 500, the broadest measure of stocks, hit a new all-time high this month and is trading just below that level with gains of 26% over the past year.
While the Berkshire Hathaway Oracle of Omaha is known for investing in companies such as Coke, American Express. Apple and its new name, Chubb, have also owned two exchange-traded funds for years, according to quarterly 13F SEC filings, which track what is considered the broadest measure of the stock market. On average, the S&P 500 returned about 10% per year.
Berkshire Hathaway Chairman and CEO Warren Buffett speaks at Fortune’s Most Powerful Women Summit in Washington, October 13, 2015. (Kevin Lamarque/File / Reuters)
The SPDR S&P 500 ETF Trust trades under the symbol SPY, and Vanguard’s S&P 500 ETF trades under the symbol VOO.
| TO SPY | SPDR S&P 500 ETF | 529.81 | +0.37 | +0.07% |
| VOO | VANGUARD S&P 500 ETF SHS INDEX FUNDS | 487.08 | +0.35 | +0.07% |
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“You can’t just buy a few stocks of the S&P 500, because you would have to buy all the individual stocks, which would be costly for individual investors, which highlights why ETFs are a great example of democratized and efficient access to diverse exposures market and asset classes,” Matthew Bartolini, head of Americas research at State Street Global Advisors, told FOX Business.
Comparing the SPY with the performance of the SPX, on an annualized basis as of April 30, 2024, since its inception on January 22, 1993, the SPY has recorded a return of 10.12% while the S&P 500 has recorded a pre-tax return of 10.26%.
The Vanguard Group headquarters in Malvern, Pennsylvania, on September 5, 2003. (Mike Mergen/Bloomberg via /Getty Images)
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Until April 30, 2024, the return of VOO since its creation on September 7, 2010 is 14% per year. This compares to 14.04% per year for the S&P 500 Index.
“It is not possible to invest directly in an index, which is why an index ETF like VOO offers investors a convenient and inexpensive way to gain exposure to large-cap US stocks,” said a portfolio holder. Vanguard’s word to FOX Business.
Both funds count Microsoft, Nvidia, which are trading at record highs, and Apple as the main titles.
| MSFT | MICROSOFT CORP. | 430.32 | +0.16 | +0.04% |
| AAPL | APPLE INC. | 189.99 | +0.01 | +0.01% |
| NVDA | NVIDIA CORP. | 1,140.59 | +75.90 | +7.13% |
Although the S&P 500 is the broadest benchmark, there are also ETFs that track the Dow Jones Industrial Average and the Nasdaq Composite. These indexes are also trading at record highs.
| Me: DJI | DOW JONES AVERAGES | 38852.86 | -216.73 | -0.55% |
| SP500 | S&P500 | 5306.04 | +1.32 | +0.02% |
| I:COMP | NASDAQ COMPOSITE INDEX | 17019.880141 | +99.09 | +0.59% |
Invesco’s QQQ ETF is a popular technology-focused fund that tracks the Nasdaq, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) mirrors the Dow.
| QQQ | INVESCO QQQ NASDAQ 100 | 459.66 | +1.71 | +0.37% |
| DIA | SPDR DOW JONES INDUSTRIAL AVG ETF T SER’1’UNITS | 388.63 | -2.01 | -0.51% |