Since 2018, Eddy Elfenbein, a finance blogger, has been leading the charge with his exchange-traded fund, AdvisorShares Focused Equity ETF (CWS), outstripping the performance of Warren Buffett's Berkshire Hathaway and Cathie Wood's ARK Invest. His strategy? A meticulously curated "buy list" of 25 stocks, updated annually, with a steadfast commitment to minimal intervention throughout the year.
Elfenbein's approach, centered around stability and long-term growth, has seen his ETF yield a remarkable 110% return, surpassing the 74% gain of Buffett's renowned conglomerate and the 45% growth of Wood's Innovation Fund. This success story began in 2016, following a surge of interest from readers of his Crossing Wall Street blog, which he has been writing since 2006.
The essence of Elfenbein's strategy is a 'set it and forget it' philosophy. By avoiding frequent trading and eschewing the allure of high-profile growth stocks, he demonstrates a disciplined, long-term investment approach. This methodology has not only simplified the investment process but also proven to be highly effective.
As of now, CWS is nearing a milestone of $100 million in assets under management. Operating as an equal-weighted ETF, each stock in the portfolio contributes approximately 4% to the fund, with an average holding period of five years.
The current "buy list" features diverse yet steady players like Hershey, Intuit, Moody's, HEICO, and Silgan. Some, like Aflac, have been stalwarts in the fund for an extended duration. When selecting stocks, Elfenbein's guiding question is whether he would be comfortable holding a stock for an average of five years. This mindset shifts the focus towards the stock's potential for dividends and long-term performance.
Remarkably, the 18-year compound gain for his buy list stands at 573%, outperforming the S&P 500's return of 447% over the same period. Elfenbein's investment philosophy, characterized by minimalism and patience, underscores his belief in the power of a 'lazy' approach to achieving exceptional results in the realm of investment.
