2 ASX ETFs That Follow Warren Buffett’s 90/10 Strategy

Warren Buffett’s 2013 shareholder letter contained a single instruction that personal finance commentators have been quoting ever since: put 90% in a very low-cost S&P 500 index fund and 10% in short-term government bonds. For Australian investors in 2026, following that instruction has never been more straightforward.

Australian retail investors directed a record $48.3 billion into ETFs during 2025, with US equity funds among the largest drivers of that flow. IVV, the iShares S&P 500 ETF, was the most traded ETF on at least one major Australian platform, with buy orders rising 156% year on year. The appetite is real. What many investors are still working out is which specific ASX-listed fund best translates Buffett’s advice into an Australian portfolio, and what local considerations, from tax reporting to currency exposure, they need to factor in before buying.

This article identifies the two ASX-listed ETFs most closely aligned with Buffett’s investment principles, explains what makes each a credible implementation of his philosophy, and walks through the practical Australian considerations any investor should understand before acting.

Why Buffett trusts index funds over stock-picking

The recommendation did not come from a conference stage or a television interview. It came from instructions Buffett wrote for the trustee of his estate, specifying how to invest on behalf of his spouse after his death. That context matters. This was not a public performance; it was a private directive with real money behind it.

“Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.”

The logic Buffett articulated in that 2013 Berkshire Hathaway shareholder letter was straightforward: most investors, including professionals, fail to outperform a low-cost index fund over long periods. Fees compound against the stock-picker. The index does the work.

At the 2024 annual shareholders meeting in Omaha on 4 May 2024, Buffett reiterated the position, telling attendees that most people are better served by an S&P 500 index fund than by attempting to pick stocks individually. The 2024 shareholder letter, published 22 February 2025, did not reverse or materially modify the guidance.

The 2013 instruction remains the operative recommendation. No subsequent statement has replaced it, and financial media outlets including The Australian Financial Review, Morningstar, and Fortune continue to reference it as definitive. For Australian investors evaluating whether this advice applies to their situation, the starting point is clear.

The Berkshire Hathaway succession that formally transferred the CEO role to Greg Abel at the start of 2026 adds a layer of context to Buffett’s index fund recommendation: the man who built a $1 trillion conglomerate through concentrated stock-picking has, for ordinary investors, consistently pointed toward passive index funds as the better path, a distinction Abel’s own addition of an Alphabet stake has already begun to complicate.

ASX: IVV reviewed, the S&P 500 fund that matches Buffett’s literal recommendation

If Buffett’s instruction is to buy a very low-cost S&P 500 index fund, IVV is the most direct ASX-listed answer. Managed by BlackRock Australia, it is a physically replicated fund that tracks the S&P 500 at a management fee of 0.04% per annum, a cost level Buffett would recognise as genuinely low.

The S&P 500 index represents 500 of the largest companies listed on US exchanges, weighted by market capitalisation. For Australian investors, a single purchase of IVV delivers exposure to names including:

• Nvidia
• Apple
• Microsoft
• Amazon
• Alphabet
• Broadcom
• Meta Platforms
• Berkshire Hathaway

The fund held $13,572,176,364 in assets under management as at 21 May 2026, according to BlackRock Australia, making it one of the largest ETFs on the ASX by any measure.

IVV has been ASX-domiciled since 2018, a structural detail with direct implications for Australian tax reporting covered later in this article.

For investors wanting to compare IVV against Vanguard’s recently launched V500 before committing capital, our dedicated guide to IVV versus V500 examines cost, liquidity, bid-ask spreads, and the AUD/USD currency drag that compressed a roughly 17.88% USD gain into a 9.20% AUD return for investors during 2025.

IVV performance in AUD terms

Returns below are denominated in AUD, meaning currency movements between the Australian dollar and US dollar are already embedded in the figures.

Performance data as at 30 April 2026. Source: InvestSMART.

ASX: MOAT reviewed, applying Buffett’s investment philosophy through an active screen

Buffett’s index fund recommendation and his stock-picking philosophy are two different things. The first says: do not try to beat the market. The second, the one that built Berkshire Hathaway, says: if you are going to pick stocks, buy companies with durable competitive advantages at sensible prices. The VanEck Morningstar Wide Moat ETF (ASX: MOAT) is designed around the second idea.

An economic moat, in Buffett’s framing, is a structural advantage that protects a company’s earnings from competitors over long periods. MOAT operationalises this concept through a dual screening process. Morningstar analysts assess whether a company’s competitive advantage is likely to persist for a minimum of 20 years. The company must also be trading at an attractive price relative to estimated intrinsic value. Only companies passing both filters enter the portfolio.

The 20-year moat durability threshold distinguishes MOAT from broader quality-factor funds. It is a screening standard that mirrors the long-term ownership horizon Buffett has advocated throughout his career.

This is an active-strategy fund, and the fee reflects it. MOAT carries a management fee of approximately 0.49%, more than 12 times the cost of IVV. The fund held approximately $917 million in assets under management as at mid-2025 (indicative; investors should verify against current VanEck Australia documentation).

On returns, the US-listed MOAT equivalent delivered a calendar-year 2025 return of approximately 13.80%, compared with approximately 17.88% for the S&P 500 over the same period, according to the VanEck US fact sheet. These figures relate to the US-listed product, not the ASX-listed version directly.

MOAT suits investors who find Buffett’s stock-selection philosophy compelling and want a fund that applies it systematically. It does not guarantee outperformance of a simple index fund, and the higher fee is a persistent headwind that passive alternatives avoid.

How IVV and MOAT compare: fees, returns, and what each investor type suits

The choice between IVV and MOAT comes down to which version of Buffett an investor wants to follow. The table below places both alongside two other commonly referenced ASX-listed US equity ETFs to give a broader decision framework.

All MER figures are indicative. Investors should verify against current issuer Product Disclosure Statements before investing.

IVV suits investors following Buffett’s literal recommendation at the lowest available cost. MOAT suits investors who want to apply his stock-selection philosophy through a managed screen, accepting the higher fee and a return profile that may diverge from the broader index. VTS is worth considering for investors who want broader US market coverage, including small and mid-cap companies, at a fee matching IVV.

The ASX diversification gap is more structural than investors often realise: financials and materials together account for over 52% of the ASX 200 by weight, while information technology represents just 3.3%, meaning a portfolio anchored in domestic equities alone has minimal exposure to the global technology companies that dominate both IVV and MOAT’s top holdings.

What Australian investors need to know before buying: tax, currency, and structure

Selecting a fund is one decision. Understanding how it behaves inside an Australian portfolio is another. Two considerations separate the theoretical appeal of these ETFs from the practical experience of holding them.

1. Tax reporting simplicity from ASX domicile. Holding IVV or VTS through the ASX means Australian investors generally avoid the US tax form complexity, such as the W-8BEN, that accompanies directly US-listed equivalents like SPY. IVV has been ASX-domiciled since 2018, and this structure simplifies annual tax reporting for Australian residents. Distributions from these funds are subject to standard Australian capital gains tax and foreign income rules under the ATO framework. Investors with complex tax situations should seek professional advice.
2. Unhedged currency exposure. All major S&P 500 ETFs on the ASX in this category are unhedged, meaning AUD/USD movements affect returns in both directions. When the Australian dollar weakens against the US dollar, unhedged returns are amplified in AUD terms. When the Australian dollar strengthens, returns are dampened. The performance figures cited for IVV earlier in this article already reflect this currency effect.

ASIC Report REP 823, published 5 November 2025, discussed developments in Australian capital markets at a broad level, providing recent regulatory context for the environment in which these ETFs operate.

ASIC Regulatory Guide RG 282 sets out the disclosure obligations, issuer requirements, and investor protections that apply to ASX-listed exchange traded products, establishing the compliance framework within which funds like IVV and MOAT operate for Australian retail investors.

Currency and tax considerations are the difference between understanding a fund’s stated return and understanding the return an Australian investor actually receives and reports.

Buffett’s advice is simple. Following it in Australia is too.

The 90/10 recommendation from 2013 remains Buffett’s operative guidance, unreversed through 2025. Australian investors now have direct, low-cost, ASX-listed vehicles to implement it.

Two paths are available. IVV follows the literal instruction: broad S&P 500 exposure at 0.04% per year, with the structural simplicity of ASX domicile. MOAT follows the underlying philosophy: concentrated exposure to companies with durable competitive advantages, screened by Morningstar analysts, at a higher fee.

“Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.”

The practical next step is straightforward. Review the current Product Disclosure Statement for the chosen fund, confirm that fees and structure are current, and consider individual tax circumstances before investing.

For investors wanting to implement the 10% bond allocation that completes Buffett’s 90/10 framework, our full explainer on short-term government bond yields examines why current US Treasury yields near 4.5-5% represent a return to pre-QE historical norms rather than a crisis signal, and how institutional bid-to-cover ratios across five major sovereign markets confirm that demand for government debt remains competitive.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. Past performance does not guarantee future results.