Amidst global economic shifts, Berkshire Hathaway (NYSE:BRK.A) has strategically expanded its investment portfolio through its subsidiary, New England Asset Management. This approach includes increasing its holdings in international ETFs such as iShares Core MSCI EA (IEFA) and iShares Core MSCI International Developed Markets ETF (IDEV). The company’s efforts reflect a calculated move to diversify and secure returns from developed markets outside the US. This development coincides with Warren Buffett’s impending departure as CEO at the end of 2025, though he will remain influential as Chairman and controlling shareholder.
Previously, New England Asset Management primarily focused its ETF portfolio on the US stock market, heavily invested in SPDR S&P 500 ETF Trust and Vanguard S&P 500 ETF, making up a significant portion of the holdings. This past concentration on domestic markets aligns with the traditional investment strategies seen across US-based hedge funds. However, the recent shift towards international exposure through the increased stakes in IEFA and IDEV signifies a strategic adjustment, potentially in anticipation of changes within global financial markets and economic landscapes.
What Are the Highlights of IEFA?
The iShares Core MSCI EA ETF aims to provide investors access to developed-market stocks outside North America, tracking the MSCI EAFE IMI Index across Europe, Asia, and other first-world countries. It has remarkably surpassed the S&P 500 and Nasdaq-100 year-to-date with impressive returns. Offering a dividend yield of 3.5% and a low expense ratio, IEFA presents itself as a lucrative option for investors seeking international exposure. NEAM, a subsidiary of Berkshire Hathaway, recently increased its stakes in IEFA by over 35% in the third quarter, valuing the investment at $48.7 million.
How Does IDEV Compare with IEFA?
IDEV shares similarities with IEFA but includes Canadian markets, adding a distinct edge in sectors like finance and commodities. Both ETFs aim to cover developed international markets but vary in geographical reach and sectoral exposure. IDEV has similarly outperformed major US indices, showing growth of 28.6% year-to-date. It offers a 3.38% dividend yield and an even lower expense ratio of 0.04%. NEAM has bolstered its IDEV holdings by 30% during the last quarter, totaling $33.72 million.
New England Asset Management also holds the Vanguard High Dividend Yield Index Fund ETF (VYM), focusing on high-dividend U.S. stocks while avoiding REITs. VYM holds a significant position within NEAM’s portfolio, contributing $35.37 million to its valuation. Although not as high-performing as IEFA or IDEV, VYM provides steady yield-focused investments with its blend of technology and financial sector exposure.
According to New England Asset Management, “
the deliberate allocation to these diversified international options aligns with our long-term vision to optimize portfolio performance amid dynamic market conditions.
” Another spokesperson noted, “
While domestic investments remain pivotal, we recognize the potential prosperity within developed global markets and have acted accordingly.
” Such sentiments further underscore the thoughtful reallocation within this investment period.
Designed to maximize returns and minimize risks through geographic diversification, these moves are evident examples of broader strategic decisions employed by Berkshire Hathaway’s investment arm. These investments indicate NEAM’s proactive approach to integrating more globally diversified ETFs to hedge against market volatility and currency fluctuations. The observant increase in such international stakes reflects not only an expansionary vision but adaptation to long-term economic forecasts, aligning asset allocation with global development indicators and possible market trends.
