Berkshire Hathaway is a single stock, not an ETF, so direct performance comparison depends on your time frame and market conditions

Berkshire Hathaway (ticker: BRK.B) is a holding company run by Warren Buffett that owns dozens of businesses outright and holds stock in many others. It is not an exchange-traded fund. When you compare an ETF to BRK.B, you are comparing a diversified basket of securities to a single company's performance. That matters because a single stock can outperform or underperform broad market indexes for years at a time, and the comparison you should make depends on what you are actually trying to do with your money.

Over the past 20 years, Berkshire Hathaway has returned roughly 10 percent annually on average. Over the same period, the S&P 500 has returned roughly 10 percent annually as well. In some years Berkshire leads; in others it lags. An ETF that tracks the S&P 500 will beat Berkshire in years when the market rises sharply and technology stocks lead. An ETF focused on value stocks or insurance companies may underperform Berkshire in years when those sectors are out of favor. The question "which performs better" has no single answer—it depends on the specific years you measure and which ETF you choose.

Key Takeaways

  • Berkshire Hathaway is a single company, not an ETF, so comparing it to an ETF means comparing one stock to a diversified basket of many stocks.
  • Over long periods, broad market ETFs like those tracking the S&P 500 have returned roughly the same as Berkshire Hathaway, though the year-to-year results differ.
  • Some ETFs beat Berkshire in specific years or market conditions, but no ETF consistently outperforms it over decades.
  • Your choice between Berkshire stock and an ETF should depend on whether you want concentrated exposure to one company or diversified exposure across many.

Why Berkshire Hathaway and broad market ETFs track so closely over time

Berkshire Hathaway holds a portfolio of stocks, bonds, and whole businesses. Buffett's strategy is to buy undervalued companies and hold them for the long term. Because Berkshire itself is so large and diversified, its performance over decades resembles the performance of the overall stock market. A broad market ETF like one tracking the S&P 500 or the total U.S. stock market will move in the same direction as Berkshire over long periods, though the magnitude and timing of moves will differ.

The reason they track similarly is structural: both Berkshire and a broad market ETF own pieces of the same large American companies. Berkshire owns Apple, American Express, Coca-Cola, and Bank of America outright or in large quantities. An S&P 500 ETF owns all 500 companies in that index, including those same stocks. When the U.S. economy grows and corporate profits rise, both investments benefit. When a recession hits, both decline. The difference is that Berkshire's portfolio is smaller and more concentrated, so it can move faster in either direction.

When specific ETFs outperform Berkshire in particular years

In 2023, the S&P 500 returned about 24 percent, while Berkshire Hathaway returned about 15 percent. The difference came down to sector exposure: the S&P 500 is heavily weighted toward technology stocks, which surged in 2023 as investors bet on artificial intelligence. Berkshire holds far less in technology and more in financial stocks and cash, so it lagged. An ETF focused on technology stocks would have beaten both the S&P 500 and Berkshire by a wide margin that year.

In 2022, the opposite happened. Berkshire returned roughly negative 8 percent, while the S&P 500 fell about 18 percent. Berkshire's large cash position and its holdings in insurance and utilities—sectors that hold up better in downturns—cushioned the decline. An ETF focused on value stocks or dividend-paying stocks would have beaten a broad market ETF that year, and Berkshire beat both.

The pattern is consistent: in years when the market favors the types of stocks Berkshire owns, Berkshire wins. In years when the market favors other sectors, other ETFs win. No single ETF beats Berkshire consistently over decades.

How to decide between owning Berkshire stock and an ETF

The choice is not really about which performs better—it is about what you are trying to accomplish. If you want to own a piece of one company run by a proven long-term investor, and you are comfortable with the risk that one company poses, Berkshire Hathaway is a direct way to do that. You own the stock, you receive the annual letter, you know what you own.

If you want to own a piece of the entire U.S. stock market or a large portion of it, an ETF is simpler and cheaper. You pay a lower fee (most broad market ETFs charge 0.03 to 0.10 percent per year, while owning individual stock has no annual fee but requires you to manage it). You own hundreds or thousands of companies instead of one. You reduce the risk that any single company's problems will hurt your portfolio.

Many investors own both: Berkshire stock as a core holding because of Buffett's track record and the quality of the businesses Berkshire owns, and a broad market ETF to ensure they own the full market. This approach gives you exposure to Buffett's stock-picking skill plus the safety of diversification.

ETFs that have beaten Berkshire in specific periods

Technology-focused ETFs beat Berkshire in 2020, 2021, and 2023, years when tech stocks surged. The Invesco QQQ Trust (QQQ), which tracks the Nasdaq-100 and is heavily weighted toward technology, returned over 40 percent in 2020 and 2021, while Berkshire returned roughly 2 percent and 30 percent respectively. In 2022, when tech crashed, QQQ fell 33 percent while Berkshire fell only 8 percent.

Value-focused ETFs beat Berkshire in 2022 and have matched it in years when value stocks outperform growth stocks. The Vanguard Value ETF (VTV) and the iShares Core S&P Value ETF (IVE) both focus on cheaper, more established companies—the type Buffett favors—but they own many of them rather than concentrating on Buffett's specific picks.

Dividend-focused ETFs beat Berkshire in years when income-paying stocks are in favor, though Berkshire itself pays no dividend and instead reinvests all earnings. The Vanguard Dividend Appreciation ETF (VIG) and the iShares Select Dividend ETF (DVY) both beat Berkshire in 2022 and 2023.

The key point: these ETFs beat Berkshire in specific years or market conditions, not consistently. An investor who switched between these ETFs and Berkshire based on which was winning would have to time the market perfectly—something almost no one does successfully.

The cost difference between owning Berkshire and owning an ETF

Berkshire Hathaway stock has no annual fee. You buy it once and hold it. An ETF charges an annual expense ratio, which is a small percentage of your investment deducted each year to pay for management and administration. Most broad market ETFs charge 0.03 to 0.10 percent per year. On a $10,000 investment, that is $3 to $10 per year.

Over decades, that small difference compounds. On a $100,000 investment growing at 10 percent per year for 30 years, the difference between a 0.05 percent fee and no fee is roughly $30,000 in final value. That is real money. However, Berkshire's performance has not been so much better than broad market ETFs that it makes up for the fee difference—in fact, over the past 20 years, Berkshire has roughly matched the S&P 500, so the fee advantage of owning Berkshire directly has been meaningful.

The trade-off is that owning an ETF requires less of your attention. You do not need to monitor one company's quarterly earnings or leadership changes. You own the whole market, and the market has always recovered from downturns historically.

Frequently Asked Questions

Has any ETF beaten Berkshire Hathaway over the past 10 years?

Technology-focused ETFs beat Berkshire over the past 10 years because tech stocks have outperformed the broader market. The Invesco QQQ Trust returned roughly 15 percent annually over that period, while Berkshire returned roughly 10 percent. However, that outperformance came with higher volatility—tech stocks fell much harder in 2022 than Berkshire did.

Should I own Berkshire instead of a broad market ETF?

That depends on your goals. If you believe Buffett's stock-picking skill will continue to beat the market, Berkshire makes sense. If you want to own the entire market at the lowest cost, a broad market ETF is simpler. Many investors own both as part of a diversified portfolio.

Why does Berkshire hold so much cash?

Buffett holds cash because he is waiting for opportunities to buy companies or stocks at prices he considers attractive. When the market falls sharply, he has money ready to deploy. This strategy means Berkshire sometimes lags in strong bull markets when other investors are fully invested, but it has protected Berkshire in downturns.

Can I replicate Berkshire's portfolio by buying an ETF?

No. Berkshire owns whole businesses that are not publicly traded, and it holds its public stock positions in different proportions than any ETF does. You can own the same public stocks Berkshire owns through an ETF, but you cannot own the private businesses or match Berkshire's exact weighting.