Tech-Focused ETF Makes Warren Buffett Seem Intellectually Superior to the Majority of Investors
Going Cyber with Warren Buffett? Here's a Look at the Tech ETF that Has His Attention
Warren Buffet, the famous investor, has shown a knack for picking stellar stocks and is also a big fan of ETFs. He advocates for these investment vehicles, especially for individual investors who aren't professional traders. One of his recommended ETFs is the one that tracks the S&P 500, reflecting the economic growth of the USA. But there's another ETF in Berkshire Hathaway's portfolio that's worth exploring.
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Buffett's Tech ETF: A Futuristic Market
Technology is shaping our world at an unbelievable pace, but it also comes with risks. The increasing cyber threats are a major concern for both governments and corporations. The potential damage from cyberattacks is escalating every day. Despite economic challenges, cybersecurity is a spending area that can't be compromised. Cutting corners would just be too costly.
In the era of artificial intelligence, cybersecurity solutions are gaining importance. Investors who bet on this market can expect high growth potential and a certain degree of stability. After all, cybersecurity is essential – a sector that continues to grow with every technological leap. Research reports suggest that the market could grow annually by over 12% by 2030.
Warren Buffett has also realized the potential in this market. Berkshire Hathaway's portfolio includes an ETF focusing on cybersecurity companies: the First Trust Nasdaq Cybersecurity ETF (or its UCITS equivalent for German investors).
This ETF includes a variety of companies from the cybersecurity industry. Some of the top holdings include Cisco, Crowdstrike, Broadcom, and Palo Alto. Most of these companies are based in the USA.
Since its launch in May 2020, the ETF has delivered stellar results. Over the past year, its performance has been around 26%. The total expense ratio (TER) stands at 0.6% per year.
Also read: Could these be the top 10 stocks in the world? Warren Buffett is wagering a significant chunk of his wealth on them
Disclosure: The price of the financial instruments is determined based on an index. Börsenmedien AG has developed this index and holds the rights to it. Börsenmedien AG has a cooperation agreement with the issuer of the displayed securities, earning remuneration from the issuer in this process.
Investing in cybersecurity could yield high growth potential, as this market is essential and expected to grow annually by over 12% by 2030. Warren Buffett, recognizing this potential, has included the First Trust Nasdaq Cybersecurity ETF in Berkshire Hathaway's portfolio, which includes top holdings such as Cisco, Crowdstrike, Broadcom, and Palo Alto, all of which are based in the USA. This ETF has delivered stellar results since its launch in May 2020, with a performance of around 26%.
