Warren Buffett – This Is an ETF Buffett Fans Will Love
Warren Buffett is big on companies that have moat, which is a defendable competitive advantage that can ensure a business remains strong for many years. For Buffett fans, there’s an exchange-traded fund (ETF) that focuses on that and invests in companies with wide moats: VanEck Vectors Morningstar Wide Moat ETF ((BA)TS:MOAT). Year to date, the ETF has done well, delivering returns of more than 20% to its investors, outperforming the S&P 500 which is up just 13% during the same period.
Some of the top holdings in the fund include blue-chip stocks such as Wells Fargo (NYSE:WFC) and Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL). Its largest holding as of June 10 was Biogen (NASDAQ:BIIB) at 3.6%, which recently obtained FDA approval for its controversial Alzheimer’s drug, Aduhelm.
The healthcare sector accounts for the biggest chunk of stocks in the fund at more than 20%, followed by technology at 17% and industrials at 15%. The fund provides some solid diversification with no single holding stock representing more than 4% of its total assets. And at the same time, it gives investors exposure to many different industries even though it has just 49 holdings. Many of the stock also pay a dividend and the Moat ETF yields 1.25%. Its net expense ratio of 0.47% is in line with what you’d expect from a typical ETF.
With a focus on moat, investors have exposure to some relatively safe stocks that can deliver great long-term returns. The average stock in the ETF trades at 25 times earnings and so you aren’t paying a fortune for these holdings, either.