Berkshire Hathaway’s largest sector holdings
Warren Buffett’s Berkshire Hathaway (BRK.B) invested heavily in the financial sector (XLF) in 2Q17. The sector represented about 33.0% of the firm’s portfolio in 2Q17.
Its strong position in the financial sector (VFH) could be signaling that the firm has an optimistic view on this sector. The financial sector generally performs well when economic activity improves. Major financial companies Wells Fargo (WFC), American Express (AXP), U.S. Bancorp (USB), and Moody’s (MCO) are the top financial holdings of Berkshire Hathaway. These stocks represented 16.0%, 7.9%, 2.7%, and 1.9%, respectively, of the firm’s portfolio in 2Q17.
Berkshire Hathaway also has a sizable position in the consumer staples (XLP) and information technology (XLK) sectors. These sectors represented 28.8% and 18.4%, respectively, of the firm’s portfolio as of June 30, 2017.
The firm’s position in the consumer staples sector is signaling that it has a sizable position in the defense sector. The defense sector has little correlation with the business cycle, so it is also known as a non-cyclical sector. The firm’s position in the defense sector could be signaling that it has enough protection for its investment from any potential market drop.
In the next part of this series, we’ll analyze Berkshire Hathaway’s largest holdings as of June 30, 2017.