Investors gained similar results in the past two years from funds owned by Warren Buffet and Cathie Wood, even though the investment approaches of the two were different.
Buffett’s Berkshire Hathaway Inc. and Wood’s ARK Innovation ETF gave about 35% over the past two years after excluding the dividends contribution. Buffets investment conglomerate and WoodETF are examples of opposite investment styles, which took different paths to achieve the result. Berkshire’s approach was classic slow and steady, whereas ARK ETF focused on growth stocks that saw both highs and lows.
As per Bloomberg News, ARK fund, which has Tesla Inc, Zoom Video Communications, and Coinbase global as the biggest holding in its portfolio, saw a growth of 200% between January 2020 and February 2021 when investors accumulated technology stocks and pandemic winners. However, the recent months saw a selloff in the market amidst a spike in bond yields and anticipation of the Federal Reserve tightening the stimulus and hiking the rates.
These concerns in the market suited Warren Buffets’ investment styles which benefitted in his value-driven approach as the market shifted wide to cheaper and more defensive sectors.
According to a November filing, Berkshire’s portfolio had tech giant Apple Inc. and consumer giants like Coca-Cola and Kraft Heinz among its top holdings. A significant stake in the Bank of America also helped the fund as an interest rate hike is set to benefit lenders.
When taking dividend contribution into account and the fund growth, the total returns of WoodETF have slightly outperformed Buffet fund. ARK fund gave its investors 39% return whereas Buffet Berkshire has 35%.
