Warren Buffett’s Berkshire Hathaway has sold its entire stakes in two S&P 500 ETFs, SPDR S&P 500 ETF Trust (SPY) and Vanguard S&P 500 ETF (VOO), contradicting his long-standing advice for investors to stick with low-cost index funds. This move was disclosed in a mid-February financial filing. Buffett has historically supported index funds, arguing that high-fee managers often profit more than clients. Berkshire Hathaway initially purchased shares in these ETFs in late 2019 but liquidated them by December 2024. Analysts speculate that concerns over the S&P 500’s heavy reliance on a few expensive tech stocks and lofty valuations may have influenced the decision. The index’s forward 12-month P-E ratio stands at 22.2, above the five- and ten-year averages. Despite this, Berkshire Hathaway retains significant holdings in individual S&P 500 companies like Bank of America, Coca-Cola, Kraft Heinz, and Apple. Buffett’s recent actions suggest a cautious approach, as the conglomerate’s cash reserves surged 94% in the third quarter. — news from Investor’s Business Daily
