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How To Buy The Warren Buffett Mutual Fund
A few days ago, Motley Fool published an article entitled, The Warren Buffett Mutual Fund. Now, just to be clear, Warren Buffett runs Berkshire Hathaway, not a mutual fund. But the article pointed out that investing in Berkshire can be difficult, because a single A share of the company will set you back a cool $111,600. Even a B share, which equals 1/30 of an A share, runs about $3,625. So Motley Fool noted that a number of mutual funds have invested a substantial amount of their portfolio in Berkshire Hathaway. By investing in those funds, you are investing in Berkshire. The article identified several of these funds, but ended with a bit of a tease.
The article described a fund that invests about 18% of its assets in Berkshire, but didn’t give up the name of the fund. Instead, if you want to know the fund, the article asked you to sign up for The Motley Fool Champion Funds newsletter. Now, I’ve never read this newsletter, and it may well be worth the $149 annual subscription fee, although I have my doubts. But if you want to know which funds own the most Berkshire, or any other company for that matter, the answer is just a few FREE clicks away. Here’s how–
- Go to Morningstar
- Type in BRK.A (or any other company ticker symbol) into the Quotes box near the top left of the page
- On the left sidebar, click on the Insider Trading link
- And then click on the Concentrated Fund Owners tab that will appear just below the name of the company
And there you have it. The Sequoia fund (SEQUX) has invested just over 25% of its assets in BRK.A shares. Here’s what it looks like in Morningstar:
And what fund has invested 18% of its assets in Berkshire? The Blue Chip Investor Fund, which you can see is a one star fund. By the way, feel free to send me $149 per year. While this tool is a great help, there is a problem here. Sequoia has an expense ratio of 1.00%, and Blue Chip sports a 1.27% expense ratio. Ouch! That brings me to the ShareBuilder part of the title to this article.
You can buy fractional BRK.A or BRK.B shares through ShareBuilder. In other words, you don’t have to pony up $111,600 for an A share or even $3,625 for a B share. If you want to invest a couple hundred dollars each month in Berkshire, you can do so at ShareBuilder
for $4 a trade. And just to be clear, I don’t have a Sharebuilder account (yet), and I don’t own shares of Berkshire (yet). You can read other tips on how to use Morninstar in the online investing section of The Dough Roller.
Update: I know do have a Sharebuilder account and own shares of Berkshire Hathaway.
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Thanks for showing me how the Morningstar application works with a practical example - very interesting.
I do have a Sharebuilder account, and I emailed the Motley Fool author with exactly this point. I’m glad you have published this rejoinder– buying BRK direct is a much better move than buying a managed mutual fund for the purpose of exposure to BRK.
More broadly: great blog!
Thanks, Mark. By the way, I’ve noticed that the Motley Fool has published that same article more than once as a way to push newsletter subscriptions.
Shouldn’t a fund that has so much Berkshire in it, have returns that correlate with Berkshire SOMEWHAT? In checking the Blue Chip Investor Fund, it looks like that fund has 20%+ in Berkshire yet Berkshire’s 5 year return is a little over 50% and BCIFX is down over 5%. What were the doing with the rest of their money? Does Morningstar have a ZERO star option? It looks like they managed to find one stock worth owning and that was Berkshire. Too bad for shareholders that all the money wasn’t invested in Berkshire.
OC Man, nice catch! I’m going to look into why BCIFX has done so poorly. It’s been impossible for any fund to keep up with Buffett, but only time will tell how long that lasts.