June 17, 2026 · 10 min read
Warren Buffett has beaten the S&P 500 over his career — but BRK/B has lagged SPY in several recent years. A complete data-driven comparison to help you decide whether Berkshire deserves a place in your portfolio alongside (or instead of) a passive index fund.
Annual returns are approximate and based on total return including dividends reinvested for the S&P 500. Berkshire does not pay dividends — returns are pure price appreciation.
| Period | BRK/B Ann. Return | SPY Ann. Return | Winner | Note |
|---|---|---|---|---|
| 1 Year (2025) | 18.4% | 23.1% | SPY | Tech mega-caps drove S&P 500; Berkshire's Apple stake helped but diversification limited upside |
| 3 Years (2023–25) | 16.2% | 12.1% | BRK | Post-rate-rise environment favored Berkshire's insurance and banking holdings |
| 5 Years (2021–25) | 14.8% | 15.3% | SPY | Near parity; Magnificent 7 concentration in S&P 500 a tailwind |
| 10 Years (2016–25) | 13.9% | 13.2% | BRK | Modest BRK edge; operating businesses compound alongside equity portfolio |
| 20 Years (2006–25) | 11.8% | 10.4% | BRK | Longer compounding period favors BRK's operating earnings quality |
Takeaway: Over full market cycles, Berkshire and the S&P 500 deliver roughly similar annualised returns. BRK tends to outperform in down markets (defensive businesses, cash position) and underperform in the strongest growth/tech bull markets.
Berkshire Hathaway is not a normal company — it is a holding company combining a publicly traded equity portfolio with wholly-owned operating businesses. Understanding both components is essential.
Berkshire's insurance businesses collect premiums upfront and pay claims later — the gap between these flows creates the "float," which Berkshire invests freely. As of 2025, Berkshire's float exceeds $170 billion — essentially $170B of investable capital that costs Berkshire near-zero, because premiums collected have historically exceeded claims paid. This float is the structural moat that gives Berkshire an investment advantage no ordinary investment company can replicate.