Bill Gates’ $48 Billion Portfolio: The 4 Stocks That Make Up 79% of His Investments

Have you ever wondered where one of the world’s richest men puts his money? I sure have! As someone who’s always been fascinated by investment strategies of the ultra-wealthy, Bill Gates’ portfolio has been on my radar for years.

Today, I’m gonna break down exactly what stocks Bill Gates owns through his Gates Foundation Trust, which manages the massive $48 billion portfolio that supports his charitable endeavors. What’s particularly interesting is that a whopping 79% of this fortune is concentrated in just FOUR stocks!

Let’s dive into these investments and see what wisdom we might extract from the billionaire’s approach.

Bill Gates: From Microsoft to Mega-Philanthropist

Before we jump into his current holdings, let’s remember who we’re talking about. Bill Gates, worth an estimated $106 billion according to Forbes ranks as the 18th richest person globally. After running Microsoft for 25 years he stepped down to focus on philanthropy through the Gates Foundation Trust.

The mission of this trust is simple but powerful: “to create a world where every person has the opportunity to live a healthy, productive life.” Over the past 25 years, the foundation has donated more than $100 billion to tackle some of humanity’s toughest problems.

The Big Four: 79% of Gates’ $48 Billion Portfolio

While the Gates Foundation owns stakes in dozens of companies, four particular investments dominate the portfolio based on the most recent data available. These four stocks account for a massive 79% of the total portfolio value

1. Microsoft (MSFT): 27% of portfolio
2. Berkshire Hathaway (BRK.A/BRK.B): 25% of portfolio
3. Waste Management (WM): 15% of portfolio
4. Canadian National Railway (CNI): 12% of portfolio

Let’s examine each of these investments to understand why Gates might be so heavily invested in them.

1. Microsoft (MSFT) – 27% of Portfolio

It’s no shocker that Microsoft tops Bill Gates’ investment list, given his history with the company. The Gates Foundation owns more than 26 million Microsoft shares valued at approximately $13 billion.

Microsoft experienced a period of stagnation for over a decade, but under CEO Satya Nadella’s leadership, it’s become a cloud computing giant and artificial intelligence powerhouse.

Some key facts about Microsoft’s current position:

• Second-largest cloud infrastructure provider globally with Azure controlling 20% of the market
• Azure is growing at 34% year over year, faster than competitors
• Total cloud revenue of $29.9 billion represents 39% of Microsoft’s total revenue
• Dividend track record stretching back to 2004 with 16 consecutive annual increases
• Current dividend yield of 0.7% (which might seem small, but comes with stock that has returned 140% over five years)
• Low payout ratio of 23% indicates plenty of room for future dividend growth

Gates regularly donates Microsoft shares to seed the Trust, which explains this substantial position.

2. Berkshire Hathaway (BRK.A/BRK.B) – 25% of Portfolio

The connection between Bill Gates and Warren Buffett goes beyond business – they’re close friends who cofounded the Giving Pledge in 2010, encouraging billionaires to donate most of their wealth. Buffett has already given away more than $60 billion and plans to eventually donate all his Berkshire Hathaway stock to charity.

The Gates Foundation currently holds about 24 million Berkshire shares valued at $11.7 billion. While these shares were donated, there are good reasons to hold them:

• Berkshire provides broad diversification through its many business holdings
• Generates steady cash flow to support charitable causes
• Despite its conservative reputation, Berkshire stock has gained 135% over the past five years, outpacing the S&P 500’s 96% returns
• Buffett is planning to step down this year but has established a strong succession plan

3. Waste Management (WM) – 15% of Portfolio

One person’s trash is quite literally treasure in this case! The Gates Foundation holds over 32 million shares of Waste Management stock, valued at nearly $7.4 billion.

Why would Gates invest so heavily in trash collection and recycling?

• These essential services generate consistent, predictable cash flow
• The company is expanding into green energy by converting organic waste into electricity or vehicle fuel
• WM has increased its dividend for 21 consecutive years (currently yielding 1.5%)
• With a payout ratio of just 46%, there’s room for continued dividend growth
• Provides a necessary service that remains in demand regardless of economic conditions

4. Canadian National Railway (CNI) – 12% of Portfolio

The final major holding in Gates’ portfolio is Canadian National Railway, with the Foundation owning nearly 55 million shares worth $5.7 billion.

This investment seems to follow Warren Buffett’s playbook. Buffett famously purchased Burlington Northern Santa Fe Railroad in 2009, calling railways a cost-effective and environmentally friendly way to transport goods.

Canadian National Railway has several attractive features:

• Largest rail network in Canada
• Only North American railway connecting Atlantic, Pacific, and Gulf Coasts
• Railroads are more efficient than long-haul trucking
• High barriers to entry create a wide economic moat
• 20 consecutive years of dividend increases, currently yielding 2.7%
• Relatively low payout ratio of 48% suggests dividend growth can continue

What Can We Learn From Gates’ Investment Strategy?

Looking at these four major holdings, several investment principles become apparent:

1. Focus on quality over quantity: Rather than diversifying across hundreds of stocks, Gates concentrates on a handful of high-quality companies.

2. Seek companies with economic moats: All four major holdings have significant competitive advantages that protect their market position.

3. Value consistent cash flow: Whether through Microsoft’s cloud services, Berkshire’s diverse businesses, Waste Management’s essential services, or Canadian National’s railway dominance, each generates reliable cash flow.

4. Appreciate dividend growth: Three of the four major holdings have long histories of consistent dividend increases, providing growing income for the foundation’s charitable work.

5. Think long-term: Gates isn’t chasing hot stocks or trying to time the market. His portfolio reflects a patient, long-term approach.

Beyond the Big Four: Other Notable Holdings

While those four investments make up 79% of the Gates Foundation Trust portfolio, there are other notable holdings worth mentioning. According to recent filings, these include:

• Caterpillar Inc. (CAT)
• Ecolab Inc. (ECL)
• FedEx Corp. (FDX)
• UPS (UPS)
• Walmart Inc. (WMT)
• Coca-Cola Company (KO)

Many of these additional holdings share similar characteristics with the top four: established businesses with strong market positions, consistent cash flows, and histories of rewarding shareholders through dividends.

Should You Invest Like Bill Gates?

While it’s tempting to simply copy Bill Gates’ investment strategy, we should recognize a few important differences between his situation and ours:

1. Different goals: The Gates Foundation is primarily focused on generating steady income for charitable giving, which might explain the focus on dividend-paying stocks.

2. Different time horizons: The foundation is designed to last for generations, allowing for an extremely long-term approach.

3. Different resources: With $48 billion to invest, the Gates Foundation has access to research, opportunities, and advisors that most individual investors don’t.

4. Different tax considerations: As a charitable foundation, the Trust doesn’t face the same tax concerns as individual investors.

That said, we can certainly apply some of the principles behind Gates’ investment approach:

• Focus on quality businesses with strong competitive positions
• Look for companies that generate consistent cash flow
• Consider dividend growth as an important factor
• Take a long-term perspective
• Don’t over-diversify if it means sacrificing quality

Final Thoughts

Bill Gates’ investment strategy through the Gates Foundation Trust reflects his practical, long-term thinking. By concentrating 79% of a massive $48 billion portfolio in just four high-quality companies, he’s made a clear statement about his investment philosophy.

For us ordinary investors, the lesson isn’t necessarily to copy his specific stock picks, but rather to understand the principles behind them: quality over quantity, economic moats, consistent cash flow, dividend growth, and patience.

And if you’ve found this breakdown of Bill Gates’ investment strategy helpful, please share it with others who might be interested. I’ll be back next week with more insights on the investment approaches of other billionaire investors.

Until then, happy investing!

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