Why Warren Buffett Loves Low-Cost S&P 500 ETFs: The Inside Scoop

The American investment specialist media outlet The Motley Fool cited investment guru Warren Buffett as to why investors should purchase an inexpensive S&P 500 Index exchange-traded fund (ETF).

According to The Motley Fool on the 3rd, Warren Buffett stated that a low-cost S&P 500 Index ETF is a suitable investment strategy for many investors. In particular, he believes that the low cost is a major advantage of this type of ETF.

Warren Buffett emphasized, “Cost is significant in investment.” “If you pay 1% in fees for a return of 7~8%, it can make a huge difference in making money after retirement.”

A typical example is the iShares S&P 500 ETF, traded on the Australian Securities Exchange (ASX). With an annual management charge of 0.04%, this product has the lowest level on the ASX.

The iShares S&P 500 ETF offers a diversified investment approach to investors. It holds stocks in 500 companies, including Microsoft, Apple, Nvidia, Amazon, Alphabet, Meta Platforms, and Berkshire Hathaway.

The iShares S&P 500 ETF has recorded an average return of 14.9% over the past ten years. Although there may be some fluctuations depending on the portfolio items, the analysis shows that the long-term performance is excellent, thanks to the robustness of the S&P 500 index.