The Simple ETF Strategy Warren Buffett Would Suggest for Everyday Investors

Why Buffett’s 90/10 Rule Still Matters

Warren Buffett has stripped investing down to its essence: simplicity, low costs, and patience. His advice is surprisingly straightforward—something most investors overlook in pursuit of complex strategies. Back in 2013, he laid out exactly what he’d want his wife’s portfolio to look like, and the numbers were crystal clear: 10% in short-term government bonds and 90% in a rock-bottom-cost S&P 500 index fund, with a specific suggestion to consider Vanguard.

This wasn’t casual speculation. Buffett was describing his ideal endowment structure, a framework that Berkshire Hathaway’s investment philosophy has validated over decades through holdings in Apple, American Express, Bank of America, Coca-Cola, and Chevron—all companies with strong cash generation and competitive advantages.

The 90% Answer: S&P 500 Through Vanguard

The heavy lifting in Buffett’s model comes from broad market exposure. The Vanguard S&P 500 ETF (VOO) is the mechanism he’d likely suggest for capturing that 90% allocation. It’s not glamorous, but it’s effective: low-cost, comprehensive, and aligned with his philosophy that most investors shouldn’t try to beat the market—they should simply own it.

This ETF tracks the 500 largest U.S. companies, giving you instant diversification across sectors. The expense ratio is nearly invisible at 0.03%, meaning your returns aren’t being nibbled away by management fees. It’s the embodiment of Buffett’s belief that cheaper is nearly always better.

The Often-Overlooked 10%: Treasury Bills as a Portfolio Anchor

Here’s where most investors get the 90/10 approach wrong. They understand the S&P 500 component but miss why Treasury bills matter.

The Vanguard 0-3 Month Treasury Bill ETF (VBIL) fills this role perfectly. It invests exclusively in U.S. Treasury bills maturing within three months, giving you a cash-like security with actual returns. As of early 2026, it yields around 3.67% with an expense ratio of just 0.07%—again, Vanguard’s signature ultra-low cost structure.

Why would Buffett suggest this? Berkshire Hathaway typically holds enormous cash reserves specifically to exploit opportunities when markets dip. Treasury bills serve the same purpose for individual investors: they’re dry powder that earns a respectable return while you wait. In the current environment, where Treasury bills offer over 3.6% annually, you’re not just parking money—you’re earning a meaningful yield above inflation without market risk.

The Hidden Logic Behind the Mix

This pairing creates a psychological and practical advantage. When stocks plunge, investors with money in Treasury bills aren’t panicked forced sellers. They can actually think clearly and potentially rebalance into weakness. That 10% allocation sitting in short-term government bonds isn’t a drag—it’s optionality.

Buffett has never been an ETF investor personally, but his public statements reveal exactly which funds align with his principles. Both VOO and VBIL embody what he champions: ultra-low fees, transparency, and a focus on time-tested asset classes rather than trendy alternatives.

The Bottom Line

Buffett’s 90/10 suggestion has remained consistent because it works. The two Vanguard ETFs that operationalize this approach—the S&P 500 fund for broad equity exposure and the Treasury Bill ETF for defensive positioning—represent exactly what he’d recommend: simplicity, costs kept to a minimum, and a structure that lets you sleep at night. In an era of financial complexity, that’s the rare timeless advice.