Warren Buffett’s Hidden Investment Strategy Revealed
Does Warren Buffett have a secret portfolio? Sort of. The holdings you see listed in Berkshire Hathaway‘s regulatory filings aren’t the only ones linked to the legendary investor.
In 1998, Berkshire acquired the reinsurance firm General Re, which owns New England Asset Management (NEAM), an investment firm with its own portfolio. NEAM holds more than 100 stocks and exchange-traded funds (ETFs), with 21% of its investments in what some consider Buffett’s “secret” portfolio. This consists of three ETFs.
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1. SPDR S&P 500 ETF Trust
The SPDR S&P 500 ETF Trust (NYSEMKT: SPY) stands out as the largest holding in NEAM’s portfolio, making up 13.1% of its total assets. It’s also one of only two ETFs included in Berkshire Hathaway’s investments.
This ETF is notable for its impressive standing—it is the largest ETF globally based on assets under management and is regularly one of the most actively traded ETFs. Designed to track the performance of the S&P 500 index, it includes 503 stocks of many successful U.S. companies such as Apple, Microsoft, Nvidia, and Amazon. So far in 2023, the SPDR S&P 500 ETF Trust has achieved a gain of 27%, largely influenced by rising interest in artificial intelligence.
The second-largest holding in NEAM’s portfolio is the iShares Core MSCI EAFE ETF (NYSEMKT: IEFA), which comprises nearly 4.2% of total holdings.
This ETF tracks the MSCI EAFE IMI Index, representing stocks from Europe, Australasia, and Asia. MSCI stands for Morgan Stanley Capital International, and EAFE stands for Europe, Australasia, and the Far East. Currently, it holds 2,682 stocks, with the largest position being Novo Nordisk, which accounts for only 1.82% of the ETF’s portfolio.
3. Vanguard High Dividend Yield ETF
NEAM’s third-largest holding is the Vanguard High Dividend Yield ETF (NYSEMKT: VYM), which comprises about 4% of its total assets.
This ETF aims to match the performance of the FTSE High Dividend Yield Index and includes 537 stocks. It offers a dividend yield of 2.49%. Leading stocks within the ETF are Broadcom, JPMorgan Chase, ExxonMobil, and Home Depot. Vanguard is renowned for its low-cost funds, and this ETF has an attractive annual expense ratio of just 0.06%.
Forecasting Performance for 2025
Looking ahead to 2025, uncertainty looms over the potential performance of these ETFs. Policies from the incoming administration could significantly impact their success. For example, if tariffs are implemented on imports, it may affect the iShares Core MSCI EAFE ETF adversely. Conversely, corporate tax cuts could boost the SPDR S&P 500 ETF Trust and the Vanguard High Dividend Yield ETF.
While the unpredictability makes it hard to say whether these ETFs will be superb choices for 2025, they might still be wise long-term investments for many.
Explore Your Investment Options
Have you ever felt like you’ve missed out on investing in successful stocks? If so, you may want to consider this.
Occasionally, analysts issue a “Double Down” stock recommendation for companies they believe are on the verge of significant growth. If you’re anxious about missing your chance, now could be the time to invest. The past performances speak volumes:
- Nvidia: If you invested $1,000 in 2009, you’d have $338,103!
- Apple: A $1,000 investment in 2008 would be worth $48,005!
- Netflix: Investing $1,000 in 2004 would yield $495,679!
Currently, we’re issuing “Double Down” alerts for three outstanding companies, and opportunities like these may not come again soon.
See 3 “Double Down” stocks »
*Stock Advisor returns as of December 16, 2024
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of Motley Fool Money. Keith Speights has positions in Amazon, Apple, Berkshire Hathaway, ExxonMobil, and Microsoft. The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway, Home Depot, JPMorgan Chase, Microsoft, Nvidia, and Vanguard Whitehall Funds-Vanguard High Dividend Yield ETF. The Motley Fool recommends Broadcom and Novo Nordisk and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
