The Coca-Cola Company (KO), Wal-Mart Stores, Inc. (WMT), American Express Company (AXP), U.S. Bancorp (USB): If Warren Buffett Were an ETF Investor

Buffett owns billions of dollars of both consumer staples heavyweights The Coca-Cola Company (NYSE:KO) and Wal-Mart Stores, Inc. (NYSE:WMT) stocks, which comprise 10% and 8%, respectively, of the Consumer Staples Select Sector SPDR ETF. This ETF boasts an attractively low annual expense ratio of 18 basis points and also pays a generous 2.8% dividend yield. Considered longevity in the ETF world, this particular fund has existed since 1998.

iShares Dow Jones US Financial Sector ETF In the depths of the financial crisis, Buffett was called upon to help out some very big banks. In exchange, he received sweetheart deals that small-fry investors like you and me couldn’t possibly come close to obtaining. As a result, in the wake of the crisis, he has substantially increased his holdings in financial services stocks.

In fact, some of Berkshire Hathaway’s top stock holdings are American Express Company (NYSE:AXP), Wells Fargo & Co (NYSE:WFC), and U.S. Bancorp (NYSE:USB). Wells Fargo represents Buffett’s top stock, at an approximate market value of $16 billion. That’s a 9% ownership of the bank. The BlackRock, Inc. (NYSE:BLK) iShares Dow Jones US Financial Sector ETF holds all three of these Buffett financial sector favorites. More than 10% of the ETF’s holdings are in these very stocks.

This ETF has been trading for 13 years. It boasts close to a 1.6% dividend yield, which will likely increase as many large banks recently passed stress tests that’ll allow them to increase their dividends. This financial sector ETF has a 0.47% annual expense ratio, perhaps a tad pricey for Buffett’s taste but still a reasonable fee.

Foolish bottom line
So far, Warren Buffett hasn’t shown a lick of interest in ETFs. But for Buffett disciples who want to either invest in ETFs or just diversify beyond individual stocks, these three provide a good start.

The article If Warren Buffett Were an ETF Investor originally appeared on Fool.com.

Fool contributor Nicole Seghetti owns shares of Wal-Mart, Wells Fargo, Procter & Gamble, and US Bancorp. Follow her on Twitter @NicoleSeghetti. The Motley Fool recommends American Express, Berkshire Hathaway, BlackRock, Coca-Cola, H.J. Heinz, Procter & Gamble, and Wells Fargo. It owns shares of Berkshire Hathaway, IBM, and Wells Fargo.

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