That’s the railroad that Buffett’s conglomerate is acquiring, a move that will expand a stable of Berkshire properties ranging from insurance to jewelry to corporate jets.
After the Jan. 21 share split, you can now get a piece of Berkshire for about $74, rather than the previous $3,500.
Berkshire’s membership in the world’s most closely tracked market index will give millions of small investors exposure to a company led by the best-known advocate of price-conscious “value’’ investing. Nearly 40 percent of all assets in US index funds track the S&P 500. That’s some $324 billion, and the anchor of many retirement portfolios.
Until now, short of buying Berkshire’s expensive stock directly, investors’ chief option for buying Buffett was getting into an actively managed fund that held Berkshire. Those funds now have some competition.
With Berkshire’s debut in the index, S&P 500 funds will have to quickly buy Berkshire shares. Anticipation of that binge triggered a 4 percent price jump for Berkshire’s newly affordable Class B shares on Wednesday. That was a day after S&P announced its decision to add a stock that had hovered within a split-adjusted $64 to $68 from August through mid-January. The shares climbed another 3 percent Thursday.
“The stock has gone nowhere for a long time now,’’ said David Winters, manager of the Wintergreen Fund, which is actively managed and has invested 6 percent of its $1 billion portfolio in Berkshire stock. “So we’ve been looking forward to an upward bump.’’
Berkshire’s long-term investors have fared well. While the S&P 500 fell 24 percent last decade, Berkshire’s Class B shares jumped 80 percent.
But if you’re about to get your first Berkshire exposure through an S&P 500 index fund, expect only a small piece of Buffett. Berkshire will make up a little more than 1 percent of the portfolio.
To get more, you’ll have to buy the stock, or get into one of the nearly three-dozen mutual funds whose Berkshire shares make up at least 5 percent of their portfolios.
