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ETF Mimics Buffett's Mega-Cap Picks

Strength can not be felt everywhere, however. Buffett's largest holding, Coca-Cola (KO), has been a noticeable lag on the Berkshire Hathaway portfolio, causing it to slightly underperform the broad S&P 500. Shares of KO have dipped over 3% in the opening weeks of 2011.

An ETF such as the iShares S&P 100 Index Fund (IOO) may be a strong option for conservative-minded investors looking for a way to mimic Buffett's increasing taste for large and mega-cap companies.

On top of listing XOM and GE has its top two positions, IOO exposes investors to a number of other well-known Buffett holdings, including Procter & Gamble (PG), Johnson & Johnson (JNJ) and Coca Cola.

Looking ahead, although Buffett appeared to have been in a selling mood over the past three months, it is unlikely that his view of the economic recovery has changed. As the markets remain on the healing path and investors take cautious steps back into equities, large, stable firms will likely continue to be a popular destination. A fund such as IOO instantly provides investors with exposure to a wide range of these leaders.

Written by Don Dion in Williamstown, Mass.


At the time of publication, Dion Money Management did not own any equities mentioned.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.
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