Investor Izzy Englander Increased Holdings in Buffett's ETF Selection During Q3. Is It Wise to Follow Suit?
Hedge fund managers might not jump at the chance to invest in exchange-traded funds (ETFs), but take a gander at the portfolios of top-tier hedge funds, and you'll likely spot some notable ETF inclusions. One prominent example is billionaire hedge fund CEO, Izzy Englander, who loaded up on an ETF that Warren Buffett also owns. So, which ETF shares the spotlight with two investment titans? Let's dive in.
Shared Favorites: An ETF for Billionaires
Englander's Millennium Management hedge fund includes five ETFs in its top 50 holdings, while Buffett's Berkshire Hathaway owns two ETFs. Despite Buffett's disdain for certain ETFs, notably those involving Bitcoin, both billionaires share an affinity for the SPDR S&P 500 ETF Trust (SPY). This ETF aims to mirror the performance of the S&P 500 Index (^GSPC). It consists of 503 shares of leading companies trading on U.S. exchanges, with a hefty representation from tech giants like Apple, Microsoft, and Amazon.
Englander boosted his hedge fund's position in the S&P 500 ETF Trust by 81% in Q3 2024, making it Millennium's largest holding. Why the following of this ETF? Let's examine some possibilities.
A Closer Look: The Logic Behind the Favor
While Englander doesn't publicly disclose his motivations, his interest in a diversified portfolio is evident. Millennium owns over 4,000 stocks and funds, hinting at his dedication to diversification. Moreover, the SPDR S&P 500 ETF's diversified portfolio of 503 stocks and representation of 11 sectors might appeal to him. Best of all, the ETF boasts a stellar track record, delivering an average annual growth of 10.41% since 1993.
Should You Follow the Billionaire's Lead?
Investing in S&P 500 ETFs can indeed be lucrative, especially for long-term investors. But if you're not a billionaire like Englander, consider the Vanguard S&P 500 ETF (VOO) instead. Like its counterpart, the Vanguard S&P 500 ETF offers excellent diversification and a strong historical performance. The key difference is cost. The Vanguard ETF boasts a minuscule expense ratio of 0.03%, compared to the S&P 500 ETF's higher 0.0945% ratio.
Englander's second-largest holding, the iShares Core S&P 500 ETF, also ranks as an affordable option for regular investors. At an annual expense ratio of 0.03%, both this fund and the Vanguard S&P 500 ETF offer a cost-effective alternative to the pricier S&P 500 ETF.
Admittedly, no one knows the innermost thoughts of billionaire investors like Warren Buffett and Izzy Englander. But by keeping an eye on their favorite investments, like the SPDR S&P 500 ETF Trust, each one of us can make more informed choices when building our portfolios.
Given the discussions about hedge fund managers investing in ETFs, particularly the SPDR S&P 500 ETF Trust, here are two sentences involving the given words:
The SPDR S&P 500 ETF Trust has garnered interest from both billionaire hedge fund CEO, Izzy Englander, and investing legend Warren Buffett, demonstrating its potential in the realm of finance and investing.
To diversify your portfolio and potentially replicate the strategies of successful investors, you might consider including ETFs like the SPDR S&P 500 ETF Trust in your own finance and investing plan.
