I was hoping to find an answer to a question that has been bugging me lately.
I noticed that Berkshire Hathaway Inc. is the 5th largest holding in VTSAX. I also know that this company holds a lot of Apple and other major US companies which are also in the top holdings.
My question is, because companies like BRKB own portions of companies like AAPL, we are owning more Apple than we realize by purchasing this index or do the index masters account for this when they make the allocations?
Obviously im not changing any investment strategy based on this, but I am curious.
BRKB overlap with VTSAX overweight AAPL?
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Re: BRKB overlap with VTSAX overweight AAPL?
Yes but it's not huge.sabtastic wrote: ↑Thu Oct 18, 2018 8:50 am I was hoping to find an answer to a question that has been bugging me lately.
I noticed that Berkshire Hathaway Inc. is the 5th largest holding in VTSAX. I also know that this company holds a lot of Apple and other major US companies which are also in the top holdings.
My question is, because companies like BRKB own portions of companies like AAPL, we are owning more Apple than we realize by purchasing this index or do the index masters account for this when they make the allocations?
Obviously im not changing any investment strategy based on this, but I am curious.
I don't have time to check but let's say Apple is 3% of S&P 500. And BH owns 5% of Apple.
Then the additional holding in AAPL is .05 x 0.03 = .0015 i.e. 0.15%. Not huge.
I think BH owns something like 10% of Amex so that might be 0.1% additional. That's one of their largest holdings, from memory.
Your big exposures in owning BH are: insurance (it's classified as an insurance company in some listings) ; electric utilities; railways; consumer staples.
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Re: BRKB overlap with VTSAX overweight AAPL?
No, because the index owns BRK at its market weight with its AAPL stake priced in.
Re: BRKB overlap with VTSAX overweight AAPL?
and cashValuethinker wrote: ↑Thu Oct 18, 2018 9:09 amYes but it's not huge.sabtastic wrote: ↑Thu Oct 18, 2018 8:50 am I was hoping to find an answer to a question that has been bugging me lately.
I noticed that Berkshire Hathaway Inc. is the 5th largest holding in VTSAX. I also know that this company holds a lot of Apple and other major US companies which are also in the top holdings.
My question is, because companies like BRKB own portions of companies like AAPL, we are owning more Apple than we realize by purchasing this index or do the index masters account for this when they make the allocations?
Obviously im not changing any investment strategy based on this, but I am curious.
I don't have time to check but let's say Apple is 3% of S&P 500. And BH owns 5% of Apple.
Then the additional holding in AAPL is .05 x 0.03 = .0015 i.e. 0.15%. Not huge.
I think BH owns something like 10% of Amex so that might be 0.1% additional. That's one of their largest holdings, from memory.
Your big exposures in owning BH are: insurance (it's classified as an insurance company in some listings) ; electric utilities; railways; consumer staples.
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Re: BRKB overlap with VTSAX overweight AAPL?
Thanks everyone. Esp. Valuethinker.
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Re: BRKB overlap with VTSAX overweight AAPL?
Personally, I wouldn't worry much about modestly overweighting something that Warren Buffett finds to be an attractive investment. I view the addition of BRKB to TSM as a positive.
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