Warren Buffett built his fortune by buying businesses with durable competitive advantages at reasonable prices and holding them for decades. As we cross into the second half of May 2026, tracking these systematic frameworks has become critical. The first half of the year has delivered a harsh sorting mechanism across value strategies, severely punishing asset classes that over-indexed on bloated tech moats while rewarding pure cash flow and low-fee stability.
MOAT: The Purest Expression of the Moat Philosophy
VanEck Morningstar Wide Moat ETF (NYSEARCA:MOAT | MOAT Price Prediction) is the most direct institutional translation of Buffett’s core idea: buy companies with sustainable competitive advantages at a discount to fair value. Morningstar’s equity analysts assign economic moat ratings based on structural advantages like switching costs, network effects, intangible assets, and cost advantages. MOAT holds only companies that earn a “wide moat” designation and trade at attractive valuations relative to Morningstar’s fair value estimates.
That dual filter (moat quality plus valuation discipline) separates this fund from a generic quality ETF. A company can have a wide moat and still be excluded if too expensive. The index rebalances quarterly, rotating toward names that have become more attractively priced relative to fair value. This creates a systematic buy-low discipline that mirrors Buffett’s insistence on margin of safety.
The portfolio holds roughly 50 to 60 names with no single position exceeding about 3%, and the sector mix skews toward information technology at 27%, consumer defensive at 18%, and healthcare at 18%. The tech weighting reflects the modern reality that software businesses often carry the most durable moats. Current holdings include Fortinet, Zoetis, and Danaher alongside Microsoft and Nvidia.
The fund carries a net expense ratio of 0.46% and has $11.6 billion in assets. While the fund historically boasts strong trailing returns, its year-to-date trajectory down roughly 4.1% highlights a deeper architectural vulnerability. In fact, Morningstar’s Q1 and mid-2026 indexes revealed that U.S. wide-moat stocks underperformed broad allocations. High-profile holdings like Microsoft and Meta suffered double-digit drawdowns, forcing analysts into selective moat downgrades as artificial intelligence functions less as a universal disruptor and more as an aggressive sorting mechanism.
COWZ: Buffett’s Cash Flow Obsession, Systematized
Buffett has long emphasized free cash flow as the true measure of a business’s earning power, preferring it over reported earnings that can be distorted by accounting choices. Pacer US Cash Cows 100 ETF (NYSEARCA:COWZ) operationalizes that preference by screening the Russell 1000 for the 100 companies with the highest free cash flow yield, rebalancing quarterly.
The result is a portfolio that systematically gravitates toward businesses generating more cash than they need, often trading at depressed prices relative to their cash production. The sector composition reflects this: technology leads at 23%, followed by healthcare at 21% and energy at 17%. Current top holdings include ConocoPhillips, Pfizer, AT&T, Bristol-Myers Squibb, and Altria, names that generate substantial cash relative to their market prices.
The fund enters mid-May with assets climbing to $18.2 billion and a stable 2.16% dividend yield following its March 2026 quarterly rebalance. COWZ’s rules-based screening currently delivers a massive fundamental divergence from the broader market: the underlying index boasts a free cash flow yield of 6.37% at a microscopic Price-to-Earnings (P/E) ratio of 18.14, compared to the Russell 1000 Value Index’s mere 3.04% FCF yield. This deep-value tilt explains its robust 4.1% gain YTD, comfortably shielding it from the momentum correction hurting tech-heavy pools.
The tradeoff is sector concentration risk. Because free cash flow yield tends to cluster in certain industries, the portfolio can carry heavy exposure to energy or healthcare, depending on where valuations sit.
OMAH: Direct Access to Berkshire’s Portfolio, With an Income Layer
VistaShares Target 15 Berkshire Select Income ETF (NYSEARCA:OMAH) mirrors the largest holdings of Berkshire Hathaway’s equity portfolio, adds Berkshire itself as a direct position, and overlays a covered call strategy to generate monthly income targeting a 15% annual yield.
The holdings read like Berkshire’s 13-F filings. Apple sits at 10.19% and Berkshire at 10.06%, followed by American Express at 8.3%, Occidental Petroleum at 6.6%, and Chevron at 5.3%. The financial sector dominates at 39%, consistent with Buffett’s long-standing preference for financial services businesses with durable competitive positions. Consumer Defensive accounts for another 17%.
The covered call overlay is the distinguishing structural feature, and by writing calls against the equity positions, the fund generates premium income that supplements dividends, allowing it to pursue that 15% income target. This comes at a cost: capped upside in strongly rising markets, since the calls obligate the fund to sell shares at the strike price if the underlying rallies through it.
OMAH’s real-world execution illustrates the exact friction of buying options-income overlays in a volatile market. Moving into mid-May, the fund successfully maintained an active monthly payout cadence—distributing a $0.23 per share dividend on April 28, 2026—but the covered call drag has capped its tracking velocity, keeping its year-to-date return essentially flat (+0.69%) while the unhedged underlying equities fluctuated. The expense ratio of 0.95% is the highest on this list. Assets stand at $689 million, making it the smallest fund here by a wide margin.
VTV: The Low-Cost Foundation for Broad Value Exposure
Vanguard Value Index Fund ETF (NYSEARCA:VTV) does not try to replicate Buffett’s stock-picking. It provides broad, passive exposure to large-cap value stocks at a cost consistent with his long-standing preference for low fees. Buffett has repeatedly argued that most investors are better served by low-cost index funds than by attempting to select individual stocks or pay active management fees.
The fund tracks the CRSP US Large Cap Value Index and holds several hundred companies. Its largest position is Berkshire Hathaway Class B at about 3%, followed by JPMorgan Chase at 3%, Exxon Mobil at 2.5%, and Johnson & Johnson at 2.3%. The sector breakdown is more balanced than the other funds here, with financials at 21%, healthcare at 15%, and industrials at 14%.
The expense ratio of 0.03% is the defining feature. At that cost, essentially nothing is consumed by fees over time, which matters enormously over multi-decade holding periods. The fund has $225.7 billion in assets, making it one of the largest ETFs, with deep liquidity and negligible tracking error. Driven by major weightings in Berkshire Hathaway and JPMorgan Chase, VTV has rocketed to an impressive 10.05% gain year-to-date as of mid-May, emerging as a definitive defensive anchor and outperforming the more concentrated funds on this list in the recent period.
The tradeoff is breadth. VTV holds every large-cap stock that qualifies as value by CRSP’s methodology, including companies with no particular competitive advantage. An investor who wants only businesses with durable moats or exceptional cash generation will find the portfolio diluted by mediocre names that happen to screen as cheap.
Which Fund Fits Which Investor
Each fund connects to Buffett’s investment principles through a different mechanism. MOAT applies Morningstar’s moat framework with a valuation filter and quarterly rotation. COWZ screens for free cash flow yield across the Russell 1000, resulting in a portfolio that shifts sector exposure as valuations change. OMAH holds Berkshire’s largest equity positions directly and uses a covered call overlay to generate monthly income, with the tradeoff of capped upside and a higher expense ratio. VTV offers broad, large-cap value exposure at minimal cost, with a portfolio that includes the full range of companies meeting CRSP’s value criteria.
Editor’s Note: This article has been updated to remove a duplicate sentence in the opening summary and to incorporate revised performance data, fund allocation percentages, free cash flow yields, dividend distributions, and total asset figures current through mid-May 2026.
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