The Bill & Melinda Gates Foundation Trust’s recent 13F filing with the Securities and Exchange Commission (SEC) has unveiled a substantial increase in its investment portfolio’s value, reaching an impressive $45.9 billion by the close of the first quarter of 2024. This notable uptick from the $42.3 billion recorded at the end of the previous year highlights the trust’s adept management of its investments, reflecting robust performance and significant gains in various asset classes.
Despite the overall growth in the portfolio’s value, the trust made intriguing adjustments to its core holdings during the first quarter of 2024, while maintaining a predominantly consistent lineup. Notably, the trust retained heavy overweight positions in four key stocks: Microsoft Corp. (MSFT), Waste Management Inc. (WM), Berkshire Hathaway Inc. (BRK.B), and Canadian National Railway Co. (CNI). Collectively, these holdings accounted for a substantial 81.5% of the trust’s portfolio, underscoring the trust’s strategic emphasis on concentration and stability.
While the trust modestly trimmed its positions in MSFT and BRK.B during Q1, the top 10 holdings continued to exert significant influence over the portfolio’s composition, reaffirming the trust’s commitment to a disciplined investment approach. Drayton D’Silva, CEO at Tower Hills Capital, noted that since Q2 2009, the top 10 investments consistently represented over 80% of the portfolio, a figure that escalated to over 90% by Q3 2014.
The trust’s investment strategy is characterized by a buy-and-hold approach, emphasizing high concentrations in public equities. This strategic focus aligns with the trust’s long-term objectives and its mission to drive positive impact across various global initiatives and causes it supports. Notably, the trust has been gradually reducing its position in BRK.B while adopting a dollar-value averaging strategy, aimed at mitigating market timing risks and ensuring prudent capital allocation.
As of March 31, the trust’s top holdings remained largely unchanged, with Microsoft Corp. maintaining its position as the leading investment in the portfolio. Microsoft’s substantial presence, comprising 33.5% of the portfolio, underscores its significance as a cornerstone investment for the trust. With a market capitalization of $3.2 trillion as of May 21, MSFT’s enduring performance reflects its continued innovation and strategic positioning in key growth sectors such as artificial intelligence and cloud computing.
Waste Management Inc. emerged as the second-largest holding in the portfolio, signaling a strategic shift toward investments with reliable and sustainable growth prospects. Waste Management’s consistent profitability and strong free cash flow make it an appealing choice for the trust, which has increased its allocation to the company amidst favorable market conditions.
Berkshire Hathaway Inc., led by renowned investor Warren Buffett, witnessed a reduction in the trust’s holdings during the first quarter, reflecting a broader trend of trimming positions. Despite this adjustment, BRK.B remains a significant component of the portfolio, offering defensive attributes and stability during periods of market volatility.
Canadian National Railway Co. rounds out the top four holdings, maintaining its position as a longstanding investment for the trust. Despite facing challenges in 2024, including labor disputes and lower-than-expected earnings, CNI’s robust track record and dividend yield continue to make it an attractive choice for long-term investors.
Overall, the Bill & Melinda Gates Foundation Trust’s investment strategy underscores its commitment to concentration, stability, and alignment with its philanthropic objectives. By maintaining a disciplined approach and making strategic adjustments to its portfolio, the trust aims to optimize returns while advancing its mission of promoting global health, education, and economic empowerment.