Led by Warren-Buffett Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) is known to be significant interests in public shares like Apple, American Express, Bank of America, Coca-colaAnd Chevron. But most of Berkshire’s value comes from its other assets, which include insurance companies, BNSF Railroad, Berkshire Hathaway Energy and a slew of retail, service and manufacturing companies.
Exchange traded funds Berkshire Hathaway holdings (ETFs) offer a way to tap into Buffett’s investment empire while maintaining diversification. Berkshire Hathaway stock is a holding in many funds, including low-cost ETFs offered by investment management company Vanguard.
Here are five Vanguard ETFs with Berkshire exposure that might be worth buying right now. But first, let’s look at why Berkshire is in a unique position heading into the new year.
In August, Berkshire became the first non-tech company to reach a market cap of $1 trillion. But Berkshire has had a turbulent few months since then, with a market cap of $977 billion at the time of writing.
It has been a uniquely contradictory year for Berkshire. Buffett has sent several warning signs to investors by shortening or selling positions and raising cash – suggesting that Buffett and his team may view the broader market as overvalued overall.
The warning signs have become even louder in recent months, as Berkshire has not repurchased any shares in a quarter for the first time since the third quarter of 2018. Berkshire’s net cash position is at an all-time high, with year-to-date net stock sales through the September quarter the highest ever.
On paper, Berkshire may be the most pessimistic ever. But that doesn’t mean buying the company is a bad idea. For starters, the $325 billion in cash and government bonds means that almost a third of Berkshire’s value is in cash. The total value of Berkshire’s public equity stakes is just under $300 billion, so the rest of the company’s value is in other assets, such as its insurance companies, railroads, and other companies mentioned earlier.
Berkshire is a stable company with many advantages in today’s relatively expensive market. It has the dry powder needed to add to stocks or make acquisitions when it thinks valuations make sense. The companies are stable cash cows that tend to grow gradually over time. They are not the kind of companies that can achieve meteoric growth, but they also have what it takes to weather an economic slowdown.