OMAH and Its Strategic Position in a Volatile Market

In an era of historically high market valuations and investor optimism, the VistaShares Target 15 Berkshire Select Income ETF (OMAH) has emerged as a compelling case study in balancing Buffett-inspired value investing with income-generation strategies. By leveraging a call-writing approach on Berkshire Hathaway's top 20 equity holdings, OMAH aims to deliver a targeted 15% annual yield while navigating a landscape where traditional long-only strategies face headwinds. This analysis explores how OMAH's design aligns with-and diverges from-Warren Buffett's principles, and whether its approach is well-suited to today's overvalued market.

Buffett's Principles and OMAH's Strategy

Warren Buffett's investment philosophy is rooted in three pillars: value investing, long-term holding periods, and a focus on business fundamentals. His 2025 Q3 portfolio, disclosed in Berkshire Hathaway's 13F filing, reflects these principles, with a $4.3 billion new position in Alphabet and reduced stakes in Apple and Bank of America, signaling a cautious stance amid high valuations. Meanwhile, OMAH mirrors Berkshire's top 20 holdings but introduces a call-writing strategy to generate income-a tactic not employed by Buffett himself. Approximately 10.6% of OMAH's portfolio is directly invested in Berkshire Hathaway stock, anchoring its strategy in the conglomerate's proven track record.

The call-writing component, however, marks a departure from Buffett's own approach. While he has long avoided short-term options strategies, OMAH's use of covered calls is designed to enhance yield in a market where cash reserves at Berkshire have surged to $382 billion, reflecting a defensive posture. This divergence raises questions about whether income generation should take precedence over pure value investing, particularly in an overvalued environment.

Market Valuations and the Case for Income Strategies

Current market conditions underscore the relevance of OMAH's approach. The Buffett Indicator-a market capitalization-to-GDP ratio-stands at 200%-213% as of July 2025, well above its historical average and signaling potential overvaluation. Simultaneously, the Fear & Greed Index, a gauge of investor sentiment, hit 74 in the same period, indicating "extreme greed" and heightened risk of a correction. In such an environment, income-oriented strategies like call-writing can provide downside protection and steady returns, even as Buffett himself cautions against overreliance on market timing.

OMAH's 15% yield target, achieved through systematic call-writing, offers a hedge against volatility. For investors wary of a market pullback, this strategy provides a buffer while maintaining exposure to Buffett's favored stocks. However, the effectiveness of this approach hinges on the stability of the underlying holdings. If Berkshire's top 20 equities face sector-specific or macroeconomic headwinds, the dual pressures of declining asset values and option premium erosion could undermine OMAH's returns.

Risks and Considerations

While OMAH's strategy is innovative, it is not without risks. Call-writing limits upside potential if the underlying stocks outperform expectations, a trade-off that Buffett's long-term buy-and-hold model avoids. Additionally, the fund's reliance on a narrow basket of stocks-closely tied to Berkshire's portfolio-exposes it to concentration risk. For instance, Buffett's recent shift toward Alphabet and away from Apple could signal changing fundamentals, yet OMAH's holdings remain static unless rebalanced.

Moreover, the overvalued market context complicates the case for high-yield strategies. As Buffett has repeatedly emphasized, "Price is what you pay; value is what you get." In a landscape where valuations are stretched, even income-generating strategies must be grounded in sound fundamentals. OMAH's alignment with Berkshire's holdings provides a degree of reassurance, but investors must remain vigilant about the broader economic outlook.

Conclusion

OMAH occupies a unique niche in today's market: it combines the discipline of Buffett's value investing with the pragmatism of income generation. While its call-writing strategy diverges from Buffett's own playbook, it addresses a critical need in an overvalued environment-providing downside protection and steady cash flow. However, the fund's success will depend on the resilience of its underlying holdings and the investor's ability to balance yield-seeking with long-term value. As Buffett's 2025 portfolio shifts and market indicators flash caution, OMAH serves as a reminder that even in uncertain times, innovation rooted in timeless principles can offer a path forward.