Billionaire investor Warren Buffett – the ‘Oracle of Omaha’ – has long been a champion in favour of simplicity in investing. He has been advising Americans for decades to hold their money in low-cost index funds that follow a certain benchmark or an index, particularly the S&P 500. In a surprising twist to Buffett’s ETF sale, his firm Berkshire Hathaway sold all of its holdings in not one, but two of the most well-known U.S.-based S&P 500 exchange-traded funds (ETFs), the Vanguard S&P 500 ETF and the SPDR S&P 500 ETF Trust. Recently, as recent as March 2025, the SEC filings are outlining a very significant shift in one of the most influential investors in the world and how they are no longer finding value in a series of exits.
From Endorsement to Exit
The most surprising thing about this decision is that here is Buffett’s own history of these funds. In May 2020, he publicly endorsed the S&P 500 for long-term investors, saying that the vast majority of people will do better owning a broadly diversified, low-cost index fund instead of trying to ‘beat the market.’ He also went as far as to say that 90 per cent of his wife’s inheritance will be invested in an S&P 500 index fund. But these comments made Buffett one of the loudest voices behind passive investing. That’s why the recent exit from these two ETFs, which combined are worth about $45.3 million, is drawing eyebrows across the investment world.
Why Did He Sell?
Experts offer a wide range of theories for Buffett’s decision that he has not explained publicly. It’s possible Berkshire Hathaway is just cleaning up its massive $267 billion portfolio. The company’s holdings were represented by the S&P 500 ETFs as (almost) a tiny fraction.
This move may be a sign that people are increasingly worried about overall market valuations or impending volatility or have simply begun to focus less on indiscriminant investing and more on stock picking going forward, said Daniel Milks, who founded Fiduciary Organization & Woodmark Advisors. If so, this might be part of a larger plan to reposition the firm’s strategy for the next market cycle.
Not a Red Flag — Yet
Plainly, it’s easy to take Buffett’s move as a red flag about the entire stock market, but experts warn against rushing to judgment. Buffett has a history of taking a long view and not being known for short-term market predictions. But he hasn’t been buying stocks, as signified by cash on the balance sheet (in this case, very large amounts of it) and his recent portfolio change, which includes selling some stocks. From what I can tell, Berkshire is still super invested in big American companies, and Buffett keeps preaching patience and simplicity in investing, at least for now.
What It Means for Everyday Investors
The sale of two very widely respected S&P 500 ETFs by Buffett might be an occasion for average investors to worry. But, financial experts claim, this doesn’t suggest people should give up index investing. Despite the changes and despite the dust, these are still among the best options for people looking for long-term, low-maintenance portfolios. Whatever the reason, nothing about Buffett’s decision is likely to have anything to do with a change in belief about what will happen to markets. It sounds much more like good old-fashioned internal management of his truly massive holdings.
