Finance blogger and ETF manager Eddy Elfenbein has outperformed Berkshire Hathaway and ARK since 2018.
He publishes a “buy list” at the start of every year, then doesn’t touch it for 12 months.
“You can get a sort of a boring portfolio, set and hold it, and be disciplined and do very well.”
At the start of every year, Eddy Elfenbein sets his 25-name “buy list” for his exchange-traded fund, then doesn’t touch it for 12 months.
The strategy has helped Elfenbein’s AdvisorShares Focused Equity ETF, ticker CWS, outperform Warren Buffett’s Berkshire Hathaway and Cathie Wood’s ARK since 2018 with 110% returns, compared to 74% for Buffett’s conglomerate and 45% for Wood’s growth-focused Innovation Fund.
In a Tuesday interview on Downtown Josh Brown’s podcast, “The Compound and Friends,” Elfenbein — who writes the Crossing Wall Street blog — said he’s published the “buy-list” every year since 2006. He said the ETF launched in 2016 after he had an influx of readers ask to invest with him.
For the fund, five stocks will get swapped if necessary at the start of each year, but otherwise, it sees no trading or shuffling.
“When I started the blog almost 20 years ago, I wanted to show investors that you can do very well in investing with a ‘set and forget’ mentality,” Elfenbein said. “You don’t have to do a lot of trading. You don’t have to be in and out. You don’t have to get well-known growth stock names. You can get a sort of a boring portfolio, set and hold it, and be disciplined and do very well.”
The fund is now closing in on $100 million in assets under management.
CWS is an equal-weighted ETF, so each stock accounts for roughly 4% of the fund. Elfenbein said the average holding period is five years.
The “buy list” this year includes Hershey, Intuit, Moody’s, HEICO, and packaging manufacturer Silgan. Many names, such as Aflac, have been a part of the fund for a long time.
When he picks a stock, Elfenbein said he asks himself, “Is this something I’d be comfortable holding for an average of five years?”
“That [question] changes your mentality,” Elfenbein said. “How you think about the stock, how you think about the dividends, what you want the stock to do for you.”
The 18-year compound gain for his buy list hovers at 573%.
That’s better than the S&P 500’s 447% return through the same stretch.
“We’re as lazy as possible,” Elfenbein said. “That’s the goal.”
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