The Warren Buffett Mutual Fund

By | May 7, 2007

The Warren Buffett Mutual Fund

By Shannon Zimmerman
May 5, 2007
Everyone knows that Warren Buffett is one of the greatest living investors. The guy’s not known as the “Oracle of Omaha” for nothing. But while shares of his Berkshire Hathaway holding company look relatively cheap in terms of their price multiples, ponying up the entrance fee might be a stretch: Berkshire’s A shares (BRK-A) currently go for $109,000 a pop, while the B shares (BRK-B) will set you back nearly $3,600 apiece.Buffett groupies
The good news is that you can get more affordable access to Buffett and his collection of subsidiaries and equity holdings — a lineup that included ConocoPhillips (NYSE: COP), Anheuser-Busch (NYSE: BUD), and Procter & Gamble (NYSE: PG) at the close of 2006 — for smaller sums. How so? Via mutual funds that hold Berkshire shares in their portfolios.

Ariel Focus (ARFFX), for example, recently had 7.6% of its assets plunked down on Berkshire B shares. The fund rounds out its portfolio with the likes of H&R Block (NYSE: HRB) and Citigroup. Oak Value (OAKVX), meanwhile, runs with a Berkshire slug that weighs in at more than 9% of assets and, if you invest via an IRA, has a $1,000 minimum. Buy shares of this puppy, and in addition to Berkshire, you’ll be investing in a portfolio that recently held 3M (NYSE: MMM) and eBay (Nasdaq: EBAY), too.

What’s that? Those funds don’t provide quite enough Buffett for you? Not to worry: In Motley Fool Champion Funds, we’ve recommended a fund — my favorite of the Buffett boys — that packs more than 16% of its assets into Berkshire Hathaway. And this fund, too, can be had (via an IRA) for a mere $1,000.

In the interest of protecting value for our members, we tend to keep our newsletter’s recommendations close to the vest. But if you want the inside scoop on this pick and all of our others, no problem. Just click here for a free 30-day guest pass.

Fund your future
In the meantime, add “access” to the list of winning traits that make investing in a world-class portfolio of mutual funds a great way to begin — and continue — your career as an investor. In addition to the likes of Berkshire, funds also open the door to areas of the market that might lie outside your circle of investing competence.

If you’re looking to dial up your exposure to, say, equities plucked from the world’s developing economies, or even industries in your own backyard that you may not fully understand — biotech and nanotech come to mind — terrific funds led by stock pickers who do understand them can be had, provided you know where (and how) to look.

Pricey picks with rookie managers should be avoided, for example, as should most funds that pack tons of assets into narrow areas of the market. Quick and easy diversification is another built-in advantage of well-chosen mutual funds.


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