GOIB: Buffett-Approved ETF Offers 20% Income Boost

Berkshire Hathaway's largest equity position is Alphabet, Google's parent company. The stock has a dividend yield of just 0.25%, but investors who want to follow Warren Buffett's lead while generating more income may be interested in the Direxion GOOGL Defined Income Boost ETF (GOIB). This single-stock ETF tracks the Cboe GOOGL Defined Income Index and aims for an annual distribution yield of 20%. By using options-based strategies, GOIB is highly likely to deliver income well in excess of what investors earn when they own Alphabet common shares.

Alphabet has a wide moat based on its intangible assets, network effect, cost advantage, and customer switching costs. This is according to Morningstar analyst Malik Khan, who notes that Google Search, YouTube, Google Cloud Platform, and the Android operating system have significant intangible assets and strong network effects.

GOIB could be an attractive option for income investors at a time when the Federal Reserve is expected to hike interest rates. The new ETF has minimal sensitivity to Fed tightening, making it a good alternative to traditional income funds. Additionally, GOIB may also be a fit for investors seeking upside participation in Alphabet shares, as Khan forecasts Alphabet's top line to grow at an 18% compound annual rate over the next five years.