Berkshire’s Blast-Off a Boon for These ETFs

One of Thursday’s more notable news items pertaining to an individual stock is the ascent of Warren Buffett’s Berkshire Hathaway (NYSE: BRK-A) to $200,000 per share. Shares of the financial services conglomerate are up just 0.9% at this writing, but in dollar terms, that works out to a gain of $1,776 and that is enough to have the stock trading at $201,385.

Given the lengthy track record of Berkshire’s A shares trading in six-digit territory, that share class is not an integral part of many ETFs. In fact, S&P Capital IQ data show Berkshire’s class A shares are not a top-10 holding in any ETF. However, Berkshire Hathaway (NYSE: BRK-B), the company class B stock, is a top-10 holding in nearly 50 ETFs, according to S&P Capital IQ.

Predictably, the ascent of Berkshire’s A shares is good news for the B shares, the latter of which are 1.1% today and earlier touched a new all-time high. And that is good news for a raft of familiar financial services ETFs, plenty of which have been in dire need of some good news. [Bank ETFs Need Some Good News]

Start with the Financial Select Sector SPDR (NYSEArca: XLF). Berkshire’s rise, the B-shares are up nearly 18% in the past 18 months, put the stock into a tie with Wells Fargo (NYSE: WFC) as XLF’s largest holding at a weight of 8.62%. Interestingly, California-based Wells Fargo is one of Berkshire’s largest equity holdings. Said another way, XLF’s weight to “Berkshire B” is more than triple its exposure to American Express (NYSE: AXP), another long-standing Buffett holding.

Investors looking for an ETF that features dominating exposure by Berkshire’s B shares can consider the RevenueShares Financials Sector Fund (NYSEArca: RWW). RWWshows revenue weighting can work at the sector level. RWW debuted in November 2008, a launch date that initially looked like a case of poor timing, but the ETF has managed to gain nearly 171% since then. The ETF features a 13.7% allocation to Berkshire’s class B stock, nearly 640 basis points more than the weight give to J.P. Morgan Chase (NYSE: JPM), the ETF’s second-largest holding. [Revenue Weighting With Bank ETFs]

RWW is up 1% today while XLF is higher by 0.6%.