'Catching Buffett with ETFs'... KB Asset Management's Berkshire Portfolio TOP10 ETFs

KB Asset Management will launch the ‘KBSTAR Berkshire Portfolio TOP10 ETF’ on the 27th. With a single exchange-traded fund (ETF), investors can simultaneously invest in Berkshire Hathaway, led by the world-renowned investment master Warren Buffett, and the company’s representative investment portfolio.

Berkshire Hathaway, acquired by Buffett in 1965, is an insurance company and investment holding company. Based on revenue from its insurance business, it increases corporate value through acquiring controlling stakes in numerous companies across various sectors such as railroads, consumer goods, and energy, as well as minority stakes in publicly traded companies, while also engaging in stock investments. Currently managing approximately KRW 400 trillion in assets, the income from stock investments accounts for about 30% of total earnings.

The compound annual growth rate (CAGR) of the stock price from the acquisition point to the end of 2022 is approximately 19.8%. This performance is roughly twice the CAGR of about 9.9% for the U.S. Standard & Poor’s (S&P) 500 TR index over the same period.

The ‘Berkshire Hathaway Top 10’ portfolio, infused with Buffett’s investment secrets, invests long-term in companies with economic moats that competitors find difficult to overcome. By employing a strategy that allocates capital by industry, it has recorded superior long-term performance compared to the market.

The ‘KBSTAR Berkshire Portfolio ETF’ tracks the ‘Solactive Berkshire Portfolio Top10 Index’ and invests in a total of 11 stocks. It holds up to 27.5% of Berkshire Hathaway stock (BRK.b), with the remaining 72.5% allocated to the top 10 stocks in Berkshire Hathaway’s investment portfolio.

The main holdings include Berkshire Hathaway (27.5%), Apple (24.9%), Bank of America (11%), American Express (9.6%), and Coca-Cola (7.7%) as of February 20.

Kim Chan-young, Head of ETF Business at KB Asset Management, said, "The KBSTAR Berkshire Portfolio TOP10 ETF is designed to closely mirror the price volatility of Berkshire Hathaway stock," adding, "We recommend it as a long-term investment portfolio for individual investors because it allows them to follow Buffett’s investment philosophy with a single ETF product."