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Investors looking for a simple, cost-effective way to invest in an index may want to follow Warren Buffett’s example.
The S&P 500, the broadest stock index, hit a record high this month and is trading just below that level, having risen 26% in the past year.
The Sage of Omaha’s Berkshire Hathaway is known for its investments in companies like Coca-Cola, American Express, Apple and his latest name, Chubb, but for years the company has also held two exchange-traded funds that track what are purported to be the broadest benchmarks of the stock market, according to its quarterly SEC filing, 13F: On average, the S&P 500 has returned about 10% a year.
Berkshire Hathaway Chairman and CEO Warren Buffett speaks at Fortune magazine’s Most Powerful Women Summit in Washington on October 13, 2015. (Kevin Lamarque/File/Reuters)
The SPDR S&P 500 ETF Trust trades under the ticker SPY, and Vanguard’s S&P 500 ETF trades under the ticker VOO.
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| spy | SPDR S&P 500 ETF | 529.50 | +3.54 | +0.67% |
| Vaux | Vanguard Index Fund S&P 500 ETF SHS | 486.73 | +3.29 | +0.68% |
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“You can’t just buy a few stocks in the S&P 500. You have to buy all the individual stocks, which is costly for retail investors. This highlights how ETFs are a great example of efficient, democratized access to different market exposures and asset classes,” Matthew Bartolini, head of Americas research at State Street Global Advisors, told FOX Business.
Comparing the performance of SPY and SPX, since its inception on January 22, 1993, SPY has returned 10.12% pre-tax on an annualized basis as of April 30, 2024, while the S&P 500 has returned 10.26%.
September 5, 2003, at Vanguard Group headquarters in Malvern, Pennsylvania. (Mike Mergen/Bloomberg/via Getty Images)
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Through April 30, 2024, VOO has returned 14% annually since its inception on September 7, 2010. This compares to 14.04% annually for the S&P 500 Index.
“Because it is not possible to invest directly in an index, index-tracking ETFs like VOO offer a convenient, low-cost way for investors to gain exposure to large-cap U.S. stocks,” a Vanguard spokesperson told FOX Business.
Both funds count Microsoft, Nvidia and Apple, which are trading at all-time highs, as major holdings.
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| MSFT | Microsoft | 430.16 | +3.16 | +0.74% |
| AAPL | Apple. | 189.98 | +3.10 | +1.66% |
| NVDA | NVIDIA Inc. | 1,064.69 | +26.70 | +2.57% |
The S&P 500 is the broadest benchmark, but there are ETFs that track the Dow Jones Industrial Average and the Nasdaq Composite Index, which are also trading at record levels.
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| Me: DJI | Dow Jones Average | 39069.59 | +4.33 | +0.01% |
| SP500 | S&P 500 | 5304.72 | +36.88 | +0.70% |
| I:Comp | Nasdaq Composite Index | 16920.794392 | +184.76 | +1.10% |
The Invesco QQQ ETF is a popular tech-focused fund that tracks the Nasdaq, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) tracks the Dow.
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| Hehehehe | Invesco QQQ Nasdaq 100 | 457.95 | +4.29 | +0.95% |
| Diamonds | SPDR Dow Jones Industrial AVG ETF T SER ‘1’ Unit | 390.64 | -0.02 | -0.01% |
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