If we’d have to zero in on one ETF that could see the biggest boost from Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A) writing a check to acquire a company, investors should look no further than the Consumer Staples Select Sector SPDR (NYSE:XLP).
We all know Warren Buffett loves brands and Berkshire Hathaway has either acquired a handful of some or has bought significant positions in others. Here are some of the most well-known acquisitions consumers would know:
2013 – Berkshire is part of a joint venture to buy H.J. Heinz for $23B
2001 – Berkshire in 2001 announced the acquisition of Fruit of the Loom from bankruptcy protection
2000 – Berkshire in 2000 announced it would buy Benjamin Moore, the paints brand
1997 – Berkshire buy The Dairy Queen chain of ice cream, burger and hot-dog spots
1996 – Buffett acquired the rest of Geico it already did not own
In looking at the Consumer Staples ETF, there are three companies that could fit into the $15-$20B market cap acquisition range. They include J.M. Smucker Company (NYSE:SJM), Hormel Foods (NYSE:HRL) and Campbell Soup (NYSE:CPB). But when you look throughout the ETF, you can easily identify others that are potentials for even larger deals.
At the end of the day, XLP offers a wide array of investor benefits from steady annual returns (4 of the last 5 years have delivered greater than double-digit returns), near 3% dividend yield for income investors, and an area of the market which investors are as familiar with than most other sectors.