Many ASX investors dream of investing in shares as Warren Buffett does. The legendary CEO of Berkshire Hathaway is universally regarded as one of the best stock pickers of all time, thanks to his remarkable returns over a more than 60-year career at the helm of Berkshire.
This is obviously easier said than done, however. Although Buffett is almost impossible to emulate, thanks to his clear and irreplicable natural abilities, he has (most fortunately for fellow investors) been generous with his wisdom and guidance over the years.
One of the traits he has consistently told investors to focus on when evaluating companies is the presence of a wide economic moat. This moat, a term Buffett himself coined, refers to an intrinsic competitive advantage a company can possess. This, like a moat around a castle, protects its profits from marauding competitors.
There isn't just one form of moat when it comes to stocks, though. It could be a powerful brand that inspires unswerving customer loyalty, like Apple or Nike arguably possess. It could be a price advantage that enables a company to sell goods or services at prices that its competitors cannot match, as Coles Group Ltd (ASX: COL) or Woolworths Group Ltd (ASX: WOW) do. Or it could be a product or service that a company provides that customers find difficult to stop using. Microsoft's Office suite or Transurban Group (ASX: TCL)'s toll roads come to mind here.
But finding growing companies with durable moats that will stand the test of time, as well as those trading at the right price, is a hard ask. No investor has perfected the art quite like Buffett.
Investing like Buffett with this ASX ETF
However, one ASX exchange-traded fund (ETF) provides Australian investors with an easy path to replicate Buffett's successful strategy. It's the VanEck Morningstar Wide Moat ETF (ASX: MOAT).
This ETF holds a relatively concentrated portfolio (40-60) of US stocks, whose moats have been screened and analysed by Morningstar and deemed attractive at current pricing.
We can see this in some of its current holdings. These include Google-owner Alphabet, Adobe, Caterpillar, and Cadbury-owner Mondelez International.
This ETF's track record has demonstrated that its Buffett-inspired strategy is effective. Since its inception in June 2015, MOAT units have returned an average of 15.15% per annum. That doesn't quite match Buffett's long-term track record, but it's an impressive figure nonetheless. And well above what the Australian market has delivered over the same timeframe.
The VanEck Morningstar Wide Moat ETF charges a management fee of 0.49% per annum.
