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01 Mar 2017

Warren Buffett on Exchange Traded Funds (ETFs)

Warren Buffett at the 2015 Select USA Investment Summit
Warren Buffett at the 2015 Select USA Investment Summit

By Tim Chesterfield, Chief Investment Officer

‘The Sage of Omaha’, Warren Buffett, has sent his eagerly awaited annual newsletter to Berkshire Hathaway shareholders. In the newsletter, he talks about the use of passive investment vehicles or Exchange Traded Funds (ETFs) as a better way to invest. Whilst this is a hotly contested topic (especially by active managers), Buffett’s wager with Protégé Partners would tend to support this view. As mentioned in this NZ Herald article, Buffett’s chosen ETF has returned 85.4% – compare this to the average hedge funds return of 22%.

At Perpetual Guardian, we have espoused the benefits of an index approach to asset allocation and the use of ETFs as the building blocks for the provision of active management. Launched in 2014, Perpetual Guardian’s actively-managed investment funds use ETFs to provide clients with a truly diversified and fully transparent investment solution spanning six risk profiles – from Capital Stable to Aggressive. The funds aim to deliver on a client’s long-term investment goals through investment in New Zealand Bonds/Equities, Australian Equities, International Bond/Equities and Global Property and Infrastructure.

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Perpetual Guardian is a trading name of The New Zealand Guardian Trust Company Limited and Perpetual Trust Limited. For Authorised Financial Advisers, a disclosure statement is available upon request and free of charge.