Billionaire Investor Bill Gates Has 87% of His $45 Billion Portfolio in Just 5

While some billionaires would rather avoid the spotlight, Bill Gates is cut from a different cloth. He is best known as the co-founder and former CEO of Microsoft (MSFT 0.22%), which he ran for a quarter of a century, but has cemented his place in history for his philanthropic and charitable work.

Gates is currently worth $131 billion (as of this writing), making him the world’s ninth richest person, according to Forbes. However, in a pact made with Warren Buffett, Gates signed The Giving Pledge and says he eventually plans to give away “virtually all” of his wealth to charitable causes.

The Bill & Melinda Gates Foundation (soon to be The Gates Foundation) is the vehicle created to support those charitable ventures. Its stated goal is “to create a world where every person has the opportunity to live a healthy, productive life.”

To that end, the foundation has paid out nearly $54 billion since 2000, in its bid to take on “the toughest, most important problems,” including disease and poverty around the globe.

The foundation’s trust holds stakes in dozens of companies in its portfolio, but 87% is made up of just these five stocks.

Image source: Getty Images.

1. Microsoft: 35%

Investors shouldn’t be surprised that Microsoft stock is the trust’s top holding, especially since Gates established the foundation with a large portion of his personal holdings. The Gates Foundation has roughly 36.5 million shares worth $15.47 billion.

But this isn’t your grandfather’s Microsoft. Beyond the company’s legacy operating system and software, its Azure Cloud is the No. 2 cloud infrastructure provider and is growing faster and taking share from its cloud rivals.

Further boosting the results is Copilot, the company’s artificial intelligence (AI) powered digital assistant, which is deeply integrated across Microsoft’s products and services. Analysts at Evercore ISI calculate that generative AI could produce incremental revenue of $143 billion by 2027.

The trust gets reliable income thanks to the dividend Microsoft has paid consistently since 2004 while boosting its payout yearly since 2011. The seemingly paltry yield of 0.71% is a function of robust stock price gains of 226% over the past five years, far outpacing the 87% gains of the S&P 500. Furthermore, its payout ratio of less than 25% ensures there’s plenty of room for dividend growth in years to come.

2. Berkshire Hathaway: 16%

The trust’s second-largest holding is Berkshire Hathaway (BRK.A -0.10%) (BRK.B -0.09%), thanks in large part to billionaire CEO Warren Buffett’s promise to donate his vast fortune to charity. In the 16 years ended in 2022 (the last time details were provided), Buffett’s contributions totaled $36 billion. As a result, the trust currently owns more than 17.3 million Berkshire shares in a stake valued at nearly $7.1 billion.

Berkshire Hathaway’s business interests — which include 67 subsidiary companies and stock holdings in more than three dozen others — provide instant diversification, which makes it an attractive investment vehicle until the funds are needed. Last year, Berkshire generated revenue that grew 20% year over year to $364 billion and net income of $97 billion.

Furthermore, with a record $189 billion in cash and equivalents on its balance sheet, Berkshire is as rock-solid as it gets.

Last year set a record for Berkshire’s portfolio of insurance companies, including National Indemnity, GEICO, General Re, Berkshire Hathaway Reinsurance, and Alleghany. In Berkshire’s year-end missive, Buffett said these companies “performed exceptionally well last year, setting records in sales, float, and underwriting profits.” In all, its insurance subsidiaries accounted for 40% of Berkshire’s operating income of $37 billion.

This underscores why Berkshire stock remains among Gates’ largest holdings.

3. Waste Management: 16%

Another thing that Buffett and Gates have in common is an appreciation of boring companies with predictable, recurring businesses. It’s hard to find a business that fits this description better than waste, trash, and garbage removal — and no one is bigger than Waste Management (WM 1.20%). One man’s trash is another man’s treasure, or so the saying goes, which is likely why the Gates Trust has more than 35.2 million shares worth $7.1 billion.

Refuse and recycling collection are the mainstays of its business, which continues regardless of the economy. This helped the company deliver robust results and higher margins despite the recent downturn.

Waste Management is also looking to expand. The company recently announced its intention to acquire medical-waste services provider Stericycle for $7.2 billion. This will help the…