Berkshire Hathaway liquidates holdings in S&P 500 ETFs

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Berkshire Hathaway has liquidated its holdings in S&P 500 ETFs from Vanguard and State Street Global Advisors, leaving the bellwether investor without any ETF positions.

Berkshire’s shares in the SPDR S&P 500 ETF Trust (SPY) and Vanguard S&P 500 ETF (VOO), each valued at roughly $22mn, were dissolved during the fourth quarter, according to disclosure filings.

The sales underscore a longer-term trend at Berkshire of retreating from securities, lifting its cash position to the highest on record — $334.2bn at the end of the year.

For nine straight quarters, Berkshire has been a net seller of securities.

This article was previously published by Ignites, a title owned by the FT Group.

Speaking in his recently released annual letter, chief executive Warren Buffett brushed off speculation that he viewed markets as overvalued.

“Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities,” he said. “That preference won’t change.”

Buffett has spoken glowingly of index funds in the past, and of Vanguard’s in particular. Writing in his 2016 letter, he recommended “low-cost index funds” as a superior alternative to hedge funds.

“When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients,” he said at the time.

In the same letter, Buffett hailed Vanguard founder Jack Bogle as the best champion of investors the country has known.

“If a statue is ever erected to honour the person who has done the most for American investors, the hands-down choice should be Jack Bogle,” Buffett said. “In his crusade, he amassed only a tiny percentage of the wealth that has typically flowed to managers who have promised their investors large rewards while delivering them nothing — or, as in our bet, less than nothing — of added value.”

*Ignites is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at ignites.com.