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Invest Like Warren Buffett With These ETFs

Sanghamitra Saha
Updated
Is (AMTD) Outperforming Other Finance Stocks This Year?

Following investing strategies of billionaire investor Warren Buffett is everyone’s dream. Buffett’s Berkshire Hathaway Inc. BRK.B has added more than 100% over the last five years (as of February 15, 2018), way better than the 73% gain of the broader market ETF SPDR S&P 500 ETF SPY during the same time frame.

The winning trend of Berkshire Hathaway is continuing as the entity tacked on about 12% in the last three months compared with 5.6% offered by the key U.S. equity gauge S&P 500 index-based ETF.

Notably, Berkshire Hathaway's 13F filing disclosing the fourth-quarter stock holdings has shown some major changes. Below we highlight those alterations in portfolios, so that retail investors can bank on some winning ETF and stock investment strategies.

Take a Bite of Apple  

Buffett is outright bullish on Apple. This is evident from his raising of stake in Apple by 23.3% to 165.3 million shares. Last year, Buffett indicated that consumers ‘want the product’ (or Apple products) despite its price. The in-fashion stock gained more than 9% in the last five days (as of Feb 15, 2018), mostly reflecting Berkshire Hathaway’s interests. Apple’s five-day gains of 6.3% came in comparison of 3.5% increase in SPY (as of Feb 16, 2018).

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Apple has a Value Score of B. Investors interested in following Buffett and being part of Apple’s growth story, can play ETFs like iShares Dow Jones US Technology ETF IYW, Select Sector SPDR Technology ETF XLK and Vanguard Information Technology ETF VGT (read: Can Tech ETFs Regain Investors' Love After Selloff Snub?).

Rush Out of IBM

Berkshire scrapped about 94.5% of its IBM holdings, leaving only 2.05 million shares. In his latest move, Buffett cut IBM holdings by about 32%. Per an article published on CNBC, Buffett last year said "IBM is a big strong company, but they've got big strong competitors too."

So, investors following Buffett may opt to stay away from the likes of First Trust NASDAQ Technology Dividend Index Fund TDIV as the fund has about 8% weight in IBM. But the fund has other strong candidates like Apple (read: ETFs to Buy as Cisco Returns to Revenue Growth in 2 Years).

Treat Teva Nicely

Berkshire surprised many investors by disclosing its stake in drug-maker Teva Pharmaceutical Industries Limited TEVA during the fourth quarter. Teva has about 15.7% weight in iShares MSCI Israel ETF EIS, around 5% weight in VanEck Vectors Pharmaceutical ETF PPH and 5.4% in VanEck Vectors Generic Drugs ETF GNRX.

Bet Big on Bank of New York Mellon

Berkshire upped its stake in Bank of New York Mellon (BK) by about 20% during the fourth quarter. The stock has about 4.6% exposure in Davis Select Financial ETF DFNL.

Get Rid of General Mortars

Berkshire offloaded 10 million shares of General Motors GM, which lowered its holdings by 16%. Funds like First Trust Nasdaq Transportation ETF FTXR and First Trust NASDAQ Global Auto Index Fund CARZ have around 7% focus in General Motors.

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General Motors Company (GM) : Free Stock Analysis Report
 
SPDR-TECH SELS (XLK): ETF Research Reports
 
SPDR-SP 500 TR (SPY): ETF Research Reports
 
FT-NDQ TECH DIF (TDIV): ETF Research Reports
 
VIPERS-INFO TEC (VGT): ETF Research Reports
 
VANECK-GEN DRG (GNRX): ETF Research Reports
 
ISHARS-US TECH (IYW): ETF Research Reports
 
FT-NDQ GL AUTO (CARZ): ETF Research Reports
 
VANECK-PHARMA (PPH): ETF Research Reports
 
ISHRS-MSCI ISRL (EIS): ETF Research Reports
 
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
 
Teva Pharmaceutical Industries Ltd. (TEVA) : Free Stock Analysis Report
 
FT-NDQ TRANSPRT (FTXR): ETF Research Reports
 
DAVIS-SEL FINL (DFNL): ETF Research Reports
 
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Zacks Investment Research
 
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