Berkshire Hathaway’s (BRK-B) portfolio is overweight on banking and financial stocks. The company holds stakes in banks like J.P. Morgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC), Goldman Sachs (GS), U.S. Bancorp, and Bank of New York Mellon. J.P. Morgan Chase is the most recent bank to find a place in Berkshire’s portfolio. Warren Buffett first bought the stock in the third quarter of 2018. Berkshire has gradually added more JPM shares in the fourth quarter of 2018 and the first quarter of 2019.
In terms of size, Bank of America and Wells Fargo are the top two banking holdings in Berkshire Hathaway’s portfolio followed by U.S. Bancorp and J.P. Morgan Chase. The calculation is based on the assumption that Berkshire has not added or sold any of these shares in the second quarter.
May price action
May was a dismal month for banking stocks. U.S. Bancorp was the best performer among Berkshire’s banking holdings and fell only 2.0% last month. Wells Fargo and J.P. Morgan Chase fell 8.3% and 8.7%, respectively. Goldman Sachs and Bank of America fell 11.4% and 13.0%, respectively. Bank of New York Mellon fell the most among Berkshire’s banking holdings and saw a negative price action of 14% last month.
Notably, barring U.S. Bancorp, all of Berkshire’s banking holdings underperformed the S&P 500 last month. The ten-year Treasury yield fell in May amid the risk-off sentiments in markets. Generally, lower long-term rates are negative for banks as they borrow short-term but lend long-term.