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Should You Buy Chubb-Heavy ETFs Following Buffett?
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Warren Buffett’s Berkshire Hathaway now owns around 27 million Chubb (CB - Free Report) shares valued at roughly $6.9 billion, compared to nearly 26 million in Q1 of 2024. Berkshire Hathaway has boosted its position in Chubb slightly, to nearly 6.7% in Q2 of 2024 from 6.4% in the prior quarter.
Amidst a challenging market landscape, Warren Buffett, along with equity managers Todd Combs and Ted Weschler, has not found many options in the investment arena this year. Their attention has largely grabbed Chubb, due to their perceived shortage in worthwhile investment opportunities.
Why Chubb Stock is Worth a Look
Headquartered in Zurich, Switzerland, the company boasts being one of the world’s largest providers of property and casualty (P&C) insurance and reinsurance and largest publicly traded P&C insurer. Chubb has diversified through acquisitions into many specialty lines, including marine, medical risk, excess property, environmental and terrorism insurance and has local operations in 54 countries and territories.
The stock comes from a top-ranked Zacks sector (top 6%) and Zacks industry (top 22%). Chubb's suite of compelling products as well as services, focus on capitalizing on the potential of middle-market businesses and investments in various strategic initiatives pave the way for long-term growth. Several distribution agreements have expanded its network, boosting its market presence.
Shares of Chubb have outperformed its industry over the past year. Second quarter EPS beat estimates. However, there are some challenges. Exposure to catastrophic losses leads to volatility in underwriting. Additionally, rising expenses put pressure on margin expansion.
Price Target of Chubb Shares
Based on short-term price targets offered by 21 analysts, the average price target for Chubb comes to $277.52. The forecasts range from a low of $249.00 to a high of $305.00. The average price target represents an increase of 3.62% from the closing price of $267.82 as of Tuesday. The company’s shares gained 1.7% on Wednesday.
ETFs That Are Heavy on Chubb Stock
Against this backdrop, below we highlight a few exchange-traded funds (ETFs) that are heavy on Chubb.
iShares U.S. Insurance ETF (IAK - Free Report) – Chubb shares have a weight of 13.05% in this ETF.
The underlying Dow Jones U.S. Select Insurance Index includes companies providing a range of specialized financial services, including securities brokers & dealers, online brokers & securities or commodities exchanges. The fund charges 40 bps in fees.
Invesco KBW Property & Casualty Insurance ETF (KBWP - Free Report) – Chubb shares have a weight of 7.90% in this ETF.
The underlying KBW Nasdaq Property & Casualty Index is a modified market capitalization weighted index that reflects the performance of approximately 24 property and casualty insurance companies. The fund charges 35 bps in fees.
Davis Select Financial ETF (DFNL) – Chubb shares have a weight of 5.56% in this ETF.
The Davis Select Financial ETF an actively managed exchange-traded fund that invests at least 80% of its net assets plus any borrowings in securities issued by companies principally engaged in the financial services sector. The fund charges 64 bps in fees.
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Should You Buy Chubb-Heavy ETFs Following Buffett?
Warren Buffett’s Berkshire Hathaway now owns around 27 million Chubb (CB - Free Report) shares valued at roughly $6.9 billion, compared to nearly 26 million in Q1 of 2024. Berkshire Hathaway has boosted its position in Chubb slightly, to nearly 6.7% in Q2 of 2024 from 6.4% in the prior quarter.
Amidst a challenging market landscape, Warren Buffett, along with equity managers Todd Combs and Ted Weschler, has not found many options in the investment arena this year. Their attention has largely grabbed Chubb, due to their perceived shortage in worthwhile investment opportunities.
Why Chubb Stock is Worth a Look
Headquartered in Zurich, Switzerland, the company boasts being one of the world’s largest providers of property and casualty (P&C) insurance and reinsurance and largest publicly traded P&C insurer. Chubb has diversified through acquisitions into many specialty lines, including marine, medical risk, excess property, environmental and terrorism insurance and has local operations in 54 countries and territories.
The stock comes from a top-ranked Zacks sector (top 6%) and Zacks industry (top 22%). Chubb's suite of compelling products as well as services, focus on capitalizing on the potential of middle-market businesses and investments in various strategic initiatives pave the way for long-term growth. Several distribution agreements have expanded its network, boosting its market presence.
Shares of Chubb have outperformed its industry over the past year. Second quarter EPS beat estimates. However, there are some challenges. Exposure to catastrophic losses leads to volatility in underwriting. Additionally, rising expenses put pressure on margin expansion.
Price Target of Chubb Shares
Based on short-term price targets offered by 21 analysts, the average price target for Chubb comes to $277.52. The forecasts range from a low of $249.00 to a high of $305.00. The average price target represents an increase of 3.62% from the closing price of $267.82 as of Tuesday. The company’s shares gained 1.7% on Wednesday.
ETFs That Are Heavy on Chubb Stock
Against this backdrop, below we highlight a few exchange-traded funds (ETFs) that are heavy on Chubb.
iShares U.S. Insurance ETF (IAK - Free Report) – Chubb shares have a weight of 13.05% in this ETF.
The underlying Dow Jones U.S. Select Insurance Index includes companies providing a range of specialized financial services, including securities brokers & dealers, online brokers & securities or commodities exchanges. The fund charges 40 bps in fees.
Invesco KBW Property & Casualty Insurance ETF (KBWP - Free Report) – Chubb shares have a weight of 7.90% in this ETF.
The underlying KBW Nasdaq Property & Casualty Index is a modified market capitalization weighted index that reflects the performance of approximately 24 property and casualty insurance companies. The fund charges 35 bps in fees.
Davis Select Financial ETF (DFNL) – Chubb shares have a weight of 5.56% in this ETF.
The Davis Select Financial ETF an actively managed exchange-traded fund that invests at least 80% of its net assets plus any borrowings in securities issued by companies principally engaged in the financial services sector. The fund charges 64 bps in fees.