HomeBusinessOne of Warren Buffett's favorite ETFs attracts $100 billion for the first...

One of Warren Buffett’s favorite ETFs attracts $100 billion for the first time

Berkshire Hathaway CEO Warren Buffett was, as usual, on to something when the company bought Vanguard’s S&P 500 ETF (VOO) a few years ago.

Since then, the exchange-traded fund has gradually become a darling of retail investors, surpassing $100 billion in net cash flow for the first time this year.

“Vanguard’s ownership structure is unique in the industry: we are owned by our funds, which in turn are owned by the funds’ shareholders. So we have no divided loyalties; we are solely focused on helping investors achieve their goals to achieve.” a Vanguard spokesperson told FOX Business.

The ETF, which mirrors the S&P 500 Index, is “more suitable for long-term goals where growing your money is essential,” according to the company’s summary.

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The S&P 500 is up 27% this year, surpassing the 6,000 level for the first time.

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Long-term investors are likely to stick with VOO over rival SPDR S&P 500 ETF Trust (SPY), which Buffett also owns, according to 13F filings.

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Both funds count Apple, Nvidia and Microsoft as their highest weightings, while Tesla and Broadcom are the lowest for VOO, and Broadcom and Alphabet for SPY.

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“Vanguard just has this reputation and, you know, it has a very dedicated investor base that just buys Vanguard funds. And they tend to be long-term oriented. They put money into those Vanguard funds, day after day, week after week So it benefits from that,” Sumit Roy, senior ETF analyst for ETF.com, told FOX Business.

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The company, founded by legendary investor John “Jack” Bogle, is best known for creating index funds.

VOO, which burst onto the scene in 2010, has $588 billion in assets and an expense ratio of 0.03%. Although SPY’s expense ratio is higher at 0.0945%, with over $688 billion in assets, it attracts nimble investors.

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“The investor base is much more diverse. You have some long-term investors, but you have a lot of traders, you have hedge funds, people coming in and out trying to time the market. So the flow, the pattern of flows is a little bit different than SPY. We see big outflows. Sometimes we see big inflows,” Roy said.

Founded in 1993, SPY was the first ETF to trade on a national exchange.

Source of original article: One of Warren Buffett’s favorite ETFs attracts $100 billion for the first time

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