The Buffett Premium: Berkshire Hathaway Versus S&P 500
Since Warren Buffett assumed control in 1965, Berkshire shares have compounded at roughly 19.8% to 19.9% annually, which compares to 10.4% returns for the S&P 500, including dividends.
This article is part of NDTV Profit's special series on Warren Buffett's investment guidelines, philosophy, top bets, and more, ahead of his retirement.
For 60 years, Berkshire Hathaway has given returns that few investors or institutions have managed to mirror, as the firm has consistently outperformed the S&P 500, not just through the stock but its holdings as well.
Through disciplined capital allocation and concentrated bets on high-quality businesses, coupled with Warren Buffett's carefully curated investment philosophy, Berkshire Hathaway has become the benchmark when it comes to equity-linked returns.
Since Buffett assumed control in 1965, Berkshire shares have compounded at roughly 19.8% to 19.9% annually, which compares to 10.4% returns for the S&P 500, including dividends.
In fact, an investment of $1,000 in Berkshire in 1965 would be worth more than $55 million by the mid-2020s, versus roughly $390,000 for the index.
Berkshire's Holdings Vs S&P 500
Berkshire’s edge has been amplified by its largest equity holdings. Apple, first bought in 2016, has generated an estimated 27% annualised total return over the past decade.
This compares to the S&P 500’s 13% to 14% gain over the same period. Even after heavy trimming in 2024 and 2025, Apple remains Berkshire’s single biggest stock holding and a major source of dividends.
Other core investments for Berkshire blends growth durability. American Express, for example, has delivered around 16% annualised returns over past 15 years, beating the broader market, and while Coca Cola lags the index in terms of price, it has paid Berkshire handsome dividends exceeding $750 million a year, translating into a yield on original cost of more than 60%.
That being said, the performance has converged recently. Over the 2015–2025 period, Berkshire’s compounded return is estimated at about 13%, roughly in line with the S&P 500. In 2025, year-to-date, Berkshire shares were up about 11%, trailing the index’s near-18% gain during a technology-driven rally.
However, Berkshire’s returns should extend beyond pure price returns. By 2025, the company was generating roughly $4.5 billion annually in dividends from its equity portfolio and managing nearly $174 billion in insurance float.
This is the Buffet premium. Not just constant outperformance, but superior long-term compounding, all while protecting capital in downturns and letting disciplined returns accumulate over decades.
