New 'Invest Like Buffett' Active ETF Offers Side Income

A new active ETF allows market participants to invest like Warren Buffett and get monthly income potential: the VistaShares Target 15 Berkshire Select Income ETF (OMAH).

On Wednesday, the asset manager announced the launch of the exchange-traded fund, which will provide investors with exposure to some of Berkshire Hathaway’s most representative equity holdings, plus an options strategy that aims to achieve an annual income target of 15%, distributed 1.25% monthly. The expense ratio is 0.95%.

As the market becomes more volatile given the global macroeconomic and political environment, investors are looking to stay invested in a way that provides slightly lower volatility, Adam Patti, CEO of VistaShares, told etf.com.

“Warren Buffett has a great track record in providing returns in all market conditions, so we thought now is the right time to bring out a strategy that gave investors his core holdings but also with the added benefit of income since Berkshire doesn’t pay dividends,” Patti said.

The equity portion of the fund tracks the Solactive VistaShares Berkshire Select Index, which reflects a group of the top 20 equity holdings that represent the publicly disclosed investments of Berkshire Hathaway and direct exposure to Berkshire Hathaway Inc. Class B (BRK.B).

However, VistaShares actively manages the allocation of the ETF’s portfolio weightings to balance exposure across the equity positions, help the fund meet its target income level and take into account regulatory filings as needed. The income portion of the fund is generated via an options strategy overseen by the options trading team at Tidal Financial Group.

When asked about this ETF and similar “invest like Buffett” products, Morningstar’s Kenneth Lamont told etf.com that Buffett himself has “repeatedly criticized investment managers for offering overly complex products and charging excessive fees for active management.”

“It's crucial that investors understand there is always a trade-off—growth potential for income or higher reward for higher risk,” Lamont said. “Even the simplest options strategies are more complex than buying individual stocks, so it's important for investors to fully understand the strategy and be aware of the worst-case scenario before investing.”

He added that, over time, the fees can erode the value of these strategies.

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