What type of bonds did Warren Buffett buy?
It's no secret that Warren Buffett, the billionaire CEO of Berkshire Hathaway, loves treasury bills, also known as T-bills. While he could invest Berkshire Hathaway's massive cash hoard of over $100 billion in nearly anything, for the time being, he's sticking with T-bills.
Berkshire Hathaway's portfolio includes a significant amount of short-term bonds, despite its leader's infamous public position. Speaking to CNBC's Becky Quick on Aug. 3, 2023, Buffett admitted: “Berkshire bought $10 billion in U.S. Treasurys last Monday. We bought $10 billion in Treasurys this Monday.
Apple is Berkshire's largest public stock holding by far. Berkshire's $155 billion Apple stake is roughly four times larger than its second-largest holding. Buffett first bought Apple shares in the first quarter of 2016, and Apple's stock price is up more than 500% since the beginning of 2016.
He owns a small bit of each in his portfolio for Berkshire, too. The two investments held in Berkshire Hathaway's portfolio that Buffett recommends more than anything else are two S&P 500 index funds. The SPDR S&P 500 ETF Trust (NYSEMKT: SPY) and the Vanguard S&P 500 ETF (NYSEMKT: VOO).
While real estate has never been a big part of Buffett's investing strategy, Berkshire Hathaway has owned shares of STORE Capital, a REIT focused on single-tenant operational real estate.
A 70/30 portfolio is an investment portfolio where 70% of investment capital is allocated to stocks and 30% to fixed-income securities, primarily bonds.
- iShares Core U.S. Aggregate Bond ETF (AGG)
- Vanguard Total World Bond ETF (BNDW)
- Vanguard Core-Plus Bond ETF (VPLS)
- DoubleLine Commercial Real Estate ETF (DCRE)
- Global X 1-3 Month T-Bill ETF (CLIP)
- SPDR Portfolio Corporate Bond ETF (SPBO)
- JPMorgan Ultra-Short Income ETF (JPST)
- iShares 7-10 Year Treasury Bond ETF (IEF)
- Sirius XM Holdings (SIRI) ...
- Chevron (CVX) ...
- Occidental Petroleum (OXY) ...
- Apple (AAPL) ...
- HP (HPQ) ...
- Paramount Global (PARA) ...
- D.R. ...
- Markel (MKL) and Globe Life (GL)
Ticker | Company | Number of Shares |
---|---|---|
BRK.B | Berkshire Hathaway Inc. | 19,916,349 |
CNI | Canadian National Railway Co. | 54,826,786 |
WM | Waste Management Inc. | 35,234,344 |
CAT | Caterpillar Inc. | 7,353,614 |
Many investors often mimic his picks, knowing that investments Buffett chooses for his portfolio have solid fundamentals and can make for good long-term investments. The three top holdings in the Berkshire Hathaway portfolio today are Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), and American Express (NYSE: AXP).
What banks does Warren Buffett own?
- American Express: 20.6% stake. ...
- Ally Financial: 9.6% Stake. ...
- Bank of America: 13% Stake. ...
- Capital One: 3.3% Stake. ...
- Citigroup: 2.9% Stake. ...
- Nu Holdings: 2.3% Stake.
Warren Buffett has said that 90 percent of the money he leaves to his wife should be invested in stocks, with just 10 percent in cash.
Prominent Billionaires and the Vanguard S&P 500 ETF (VOO)
Buffett, the chairman of Berkshire Hathaway, which is valued over $850 billion, has even recommended this ETF in his will for his family's inheritance.
Stock | Number of Shares Owned | Value of Stake |
---|---|---|
Coca-Cola (NYSE:KO) | 400,000,000 | $23.8 billion |
Chevron (NYSE:CVX) | 126,093,326 | $18.9 billion |
Occidental Petroleum (NYSE:OXY) | 248,018,128 | $15.1 billion |
Kraft Heinz (NASDAQ:KHC) | 325,634,818 | $11.3 billion |
As Charlie Munger put it: “We don't have any competitive advantage over experienced real estate investors in the field." Buffett himself said something similar and extended this to REITs: I think [real estate] tends to be more accurately priced, particularly more developed real estate, most of the time...
Warren Buffett loves a good dividend growth stock. Such companies consistently grow their profits year after year and elect to return those higher profits to shareholders.
Just take a look at the enormous Berkshire investment portfolio that Buffett oversees. At the end of September, Berkshire held about $340 billion of stocks; $157 billion of cash, mostly in U.S. Treasury bills maturing in less than a year; and just $22 billion of bonds.
Warren Buffett is no fan of the bond market. At a time when every professional fixed-income investor and strategist seems to be recommending the purchase of bonds, Warren Buffett isn't buying that view.
Warren Buffet's 2013 letter explains the 90/10 rule—put 90% of assets in S&P 500 index funds and the other 10% in short-term government bonds.
Vanguard High-Yield Corporate Fund Investor Shares
The Vanguard High-Yield Corporate Fund (VWEHX) takes the top spot on our list of the best high-yield bond funds for April 2024 thanks, largely, to its low expense ratio.
Which bond gives the highest return?
Bond name | Rating | Coupon Rate |
---|---|---|
10.50% ICICI LOMBARD GEN INSURANCE CO LTD INE513L08024 Unsecured | ICRA AAA | 10.50% |
17% KRISHNAIAH PROJECTS PRIVATE LIMITED INE089Y07079 Secured | Unrated | 17% |
9.45% GUJARAT STATE INVESTMENTS LIMITED INE08EQ08056 Unsecured | INDIA AA- | 9.45% |
8.80% L&T FINANCE LIMITED INE027E07AP2 Secured | INDIA AAA | 8.80% |
In order to get adequate diversification, it's a good idea to spread the bond portion of your portfolio among various Treasury bonds, high-grade corporate bonds and, if you're in a high tax bracket, municipal bonds (because interest on munis is tax-free).
Buffett is also uninterested in gold. In his 2011 letter to shareholders, he noted that gold has two significant shortcomings, “being neither of much use nor procreative.” “If you own one ounce of gold for an eternity, you will still own one ounce at its end.
- Palo Alto Networks Inc. (ticker: PANW)
- Nvidia Corp. (NVDA)
- Apple Inc. (AAPL)
- Microsoft Corp. (MSFT)
- Alphabet Inc. (GOOG)
- Tesla Inc. (TSLA)
- AllianceBernstein Holding LP (AB)
- Walt Disney Co. (DIS)
He bought See's Candy in 1972, a purchase that generated more cash flow for investing. He also invested in American Express, Bank of America, Coca-Cola, and Apple, among many others, focusing on solid brands and businesses with a secure economic moat.
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