Warren Buffett Owns 1 Vanguard ETF That Could Soar 163%, According to a Top Wall Street Analyst

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Warren Buffett, CEO of Berkshire Hathaway, oversees a portfolio of 45 publicly traded stocks and securities worth $315 billion, in addition to a $277 billion cash pile and numerous private, wholly owned businesses.

Buffett has a remarkable track record. His investment picks have propelled Berkshire stock to a compound annual return of 19.8% since he took the helm in 1965, crushing the 10.2% average annual gain in the S&P 500 (SNPINDEX: ^GSPC) index over the same period.

Buffett knows average investors would struggle to replicate his returns by picking individual stocks, so he often recommends they buy exchange-traded funds (ETFs) instead. And Berkshire has two in its portfolio: the Vanguard S&P 500 ETF (NYSEMKT: VOO), and the SPDR S&P 500 ETF Trust.

Both are designed to track the performance of the S&P by holding the same stocks and maintaining similar weightings, but the Vanguard ETF is cheaper to own (which I'll discuss further in a moment), so let's focus on that one.

If one particular Wall Street analyst is right, it could be poised for 163% upside by 2030!

Warren Buffett smiling, surrounded by cameras.
Image source: The Motley Fool.

Why the Vanguard S&P 500 ETF is a great choice for investors

The S&P 500 has strict entry criteria. Companies need to have a market capitalization of at least $18 billion and must be profitable. Even then, admission is at the discretion of a committee, which rebalances the index once every quarter.

As a result, investors can rest assured they are buying exposure to the highest quality companies when they put money into the Vanguard S&P 500 ETF. And it has an expense ratio of 0.03% (the proportion of the fund deducted each year to cover costs), making it far cheaper to own than the SPDR ETF, which has an expense ratio of 0.09%.

The ETF is made up of 11 different sectors. Technology is the largest with a 31.1% weighting, followed by financials at 13.2%, and healthcare at 12.2%. The tech industry is likely to drive the S&P higher for years because it's home to the world's most valuable companies, and the index is weighted by market capitalization.

The top five holdings in the Vanguard S&P 500 ETF have a combined market cap of $12.9 trillion, accounting for just over 25% of the total value of its entire portfolio of 500 companies:

Stock

Vanguard ETF Portfolio Weighting

1. Apple

6.97%

2. Microsoft

6.54%

3. Nvidia

6.20%

4. Amazon

3.45%

5. Meta Platforms

2.41%

Data source: Vanguard. Portfolio weightings are accurate as of Aug. 31 and are subject to change.

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