Investing
5 Actively Managed ETFs That Outperformed Warren Buffett Last Year
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Warren Buffett has outperformed the S&P 500 for many years, and he continues to deliver impressive gains for investors. Berkshire Hathaway Inc. (NYSE: BRK-B) has gained 23% over the past year and has more than doubled over the past five years.
Although the investor often touts index funds over actively managed funds, some portfolio managers have outperformed the Oracle of Omaha. These are some of the actively managed ETFs that beat Berkshire Hathaway this year.
Warren Buffett has outperformed the stock market for many years while advocating for index funds over actively managed funds.
However, these five actively managed ETFs managed to outperform Berkshire Hathaway over the past year.
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All Bitcoin ETFs have outperformed Warren Buffett over the past year. However, CRPT is unique since it isn’t only about Bitcoin. This fund holds assets that are positioned to benefit from the crypto boom and the digital economy.
It has a 0.85% expense ratio, but it made up for it with a 202% return over the past year. MicroStrategy and Coinbase are the two largest holdings, making up more than 35% of the fund’s total assets. The fund has 25 holdings, but the top 10 are the ones that matter. Those 10 holdings make up 95% of the fund’s total assets.
The ARK Fintech Innovation ETF (NYSEARCA:ARKF) gives investors exposure to innovative fintech companies that are growing rapidly. The fund’s top three positions — Coinbase, Shopify, and Robinhood — make up more than 25% of the fund’s total assets.
Those top three holdings, plus the remaining picks, have powered ARKF to a 62% return over the past year. The fund has a 0.75% expense ratio, which is higher than that of passive ETFs, but the 1-year return makes up for it.
Although some of the funds on this list have been roller coasters that happened to generate strong 1-year returns, the USCF Midstream Energy Income Fund ETF (NYSEARCA:UMI) is an exception. Its 48% return over the past year puts it ahead of Berkshire Hathaway, but it also has a 112% return over the past five years. That figure is higher than Berkshire Hathaway’s 5-year return.
The fund has a 0.85% expense ratio and more than $400 million in total assets. UMI puts all of its capital in the energy sector, including 69% of its total assets in its top 10 holdings.
Targa Resources is its second-largest holding, making up 9.3% of its total assets. Targa gets a special mention since its shares are up by 149% over the past year and have soared by 441% over the past five years. It’s not an AI stock, but it’s crushing flashy picks, nevertheless. It also helps to explain why UMI has been outperforming Berkshire Hathaway.
The Alger 35 ETF (NYSEARCA:ATFV) invests in 35 U.S. corporations. It’s up by 50% over the past year and prioritizes big-name companies. Its top five holdings are Amazon, Nvidia, Apple, AppLovin, and Netflix, which make up approximately 38% of the fund’s total assets.
The fund is still pretty small, relatively speaking. It has $34.5 million in total assets and a 0.55% expense ratio. Roughly 40% of the fund’s capital is allocated to the tech sector. Consumer cyclicals are the second largest sector, making up 24% of ATFV’s total assets.
The Fidelity Blue Chip Growth ETF (BATS:FBCG) is up by 39% over the past year and has gained 137% over the past five years. Despite being an active ETF with a 0.59% expense ratio, it has outperformed Berkshire Hathaway for multiple years. That 5-year stretch isn’t even a fluke, as FBCG has delivered an annualized 14.8% return over the past 15 years.
What makes this fund so special? Unsurprisingly, this fund puts a lot of its capital into the Magnificent Seven stocks. The top three holdings — Nvidia, Apple, and Amazon — make up roughly 34% of the fund’s total assets. Furthermore, FBCG spreads 62% of its total assets across its top 10 holdings. Almost half of its capital happens to be concentrated in tech stocks.
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