InvestorQ : I have heard a lot about Warren buffet about investing & want to know about his ETFs?
tanvi Patel made post

I have heard a lot about Warren buffet about investing & want to know about his ETFs?

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Niharika Kamble answered.
1 year ago
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In 2007, legendary investor Warren Buffett made a $1 million bet against Protégé Partners that hedge funds wouldn’t outperform an S&P index fund, and he won. Buffett’s choice fund, the Vanguard 500 Index Fund Admiral Shares, returned 7.1% compounded annually, while the basket of hedge funds his competitor chose returned an average of only 2.2%.

In this context, Buffet recommends amateur investors to invest in index funds overpaying high-cost management firms to do the same for you. Everyone may not grasp the tenets of stock picking. Long-term investors will then benefit from the simpler strategy of investing in a low-cost passive fund which will grow over time.

An index fund mirrors a benchmark index, thus providing automatic diversification, which minimizes your overall risk. Importantly, there's no market timing or individual stock picking involved — the fund simply tracks the performance of the stock index. Buffet believes that just by investing in low-cost index funds or ETFs, even an investor who lacks sufficient knowledge about the markets likely outperforms most investment professionals.

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Ishita Jain answered.
2 years ago
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Warren Buffet has been a strong proponent for passive investing. Buffett has famously said that the best investment option for most Americans is simple, low-cost index funds. Buffett has mentioned S&P 500 index funds, in particular, saying that such an investment is a bet on American business, which should perform quite well over time. Invariably this leads to some bafflement, because Buffett is one of the most highly regarded stock pickers of all time, with Berkshire Hathaway's stock portfolio significantly outperforming the S&P 500 index over the years.

However, recently Buffet took his own advice and added two ETFs to the Berkshire Hathway portfolio. Berkshire added to the Vanguard S&P 500 ETF, ticker VOO, and SPDR S&P 500 ETF Trust, known as SPY, in the final quarter of 2019, according to a regulatory filing. The relatively small investments, which totaled US$25 million across both funds, are Berkshire’s only publicly disclosed ETF holdings in its most recent quarterly 13F filing. Less than 1% of Berkshire’s liquid equity portfolio is invested in index funds.
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