Buffett’s Berkshire is being packaged into a leveraged ETF
Warren Buffett created Berkshire Hathaway Inc.’s Class B shares almost 30 years ago to stymie money managers who sought to split the high-priced conglomerate’s stock.
One of South Korea’s largest retail brokerages now plans to package the Class B shares into an exchange-traded fund turbocharged with derivatives, another move that Buffett might not like.
Kiwoom Securities Co. teamed up with Milwaukee-based Tidal Investments to form an ETF designed to provide 200% the daily performance of Berkshire, according to a regulatory filing.
Single-stock ETFs such as this have been sweeping the fund world, using leverage that amps up the potential returns — and losses — of high-flyers such as Nvidia Corp. and Tesla Inc. In South Korea, brokerages such as Toss Securities and Mirae Asset Securities Co. have been seeking to capitalize on rising demand for US stocks amid sluggish performance by domestic equities.
“Traditionally on the leveraged ETFs, the lion’s share of the interest and asset flow has been on the more volatile names,” Gavin Filmore, chief revenue officer for Tidal, said in an interview. “Berkshire is almost the polar opposite.”
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