A certificate selects the most promising stocks from the Berkshire Hathaway stock portfolio in order to outperform the star investor. By Thomas Strohm, Euro am Sonntag
Many investors would like to invest as successfully in the long term as Warren Buffet. His private equity firm Berkshire Hathaway has outperformed broad US indices such as the S&P 500 for the past 20 years. And even if the value investing praised by Buffett with a focus on cheaply valued stocks has lagged behind growth stocks from companies that are highly valued but promise growing profits for several years, the fascination that the legendary investor has on investors is exercises, unbroken.
On the occasion of Buffett’s 90th birthday, which was celebrated at the end of August, Vontobel issued a certificate that is intended to pool the most promising stocks from the Berkshire Hathaway portfolio. The goal is to outperform Buffett’s company stock. At least in the back calculation for the past ten years, this worked. The basis for the selection process is formed by the quarterly reports to the US Securities and Exchange Commission, which disclose the stocks in which Buffett’s company has invested – in addition to its holdings in unlisted companies. Most recently, Berkshire held shares in around 50 companies listed on the US stock exchanges, as well as ETFs on the S&P 500.
Pay attention to the Apple share
For the Omaha Alpha Index calculated by Solactive, which the certificate tracks 1: 1, 20 companies are selected from these around 50 companies. Vontobel set up the selection criteria in collaboration with securities expert Thomas Rappold. Those companies that score the most in terms of innovation, brand appeal and certain financial indicators are included. The composition is checked every quarter and the index members are again weighted equally. Dividends are included in the calculation of the share barometer. The management fee is 1.2 percent annually. Investors should be aware of the currency risk, as all shares in the certificate are listed in dollars.
The shares of UPS currently have the greatest weight in the index, general Motors, Coca-Cola, Biogen and American Express each with a little more than five percent. Here a big difference between buying the Vontobel certificate (ISIN: DE 000 VP7 WBU 0) and buying Berkshire Hathaway shares (US 084 670 702 6) becomes clear. Because of the quarterly equal weighting and the share price development since then, Apple currently has the lowest share of all 20 titles at just under five percent. Apple was recently by far the largest stock in Berkshire’s stock portfolio – according to the latest SEC report, it weighs a good 44 percent.