In this article we discuss Bill Gates’ Most Recent Investments. If you want to skip our detailed discussion of the history and investments of the Bill & Melinda Gates Foundation Trust, go directly to Bill Gates’ 5 Most Recent Investments.
The Bill & Melinda Gates Foundation was launched in 2000 by the American billionaire, philanthropist and founder of Microsoft, Bill Gates. As of the end of the fourth quarter of 2020, the fund reported $22.34 billion in managed 13F securities. Its top 10 holdings account for about 96% of the total portfolio. The Bill & Melinda Gates Foundation is not your usual hedge fund investing money to optimize profits and increase returns. The foundation says its goal is to solve key problems faced by humans worldwide, including poverty, diseases, food insecurity and lack of opportunities. As of 2018, Bill and his wife Melinda Gates has donated around $36 billion to the foundation. Legendary investor Warren Buffett, who is also a close friend of Gates’, plays a key role in the foundation and Gates’ philanthropy projects. In 2006, the 90-year-old Oracle of Omaha pledged most of his fortune to the Gates Foundation.
The Bill & Melinda Gates Foundation is run by Michael Larson, who is also the Chief Investment Officer of the foundation. Larson, with his wife, moved to Seattle in 1994 to work at Cascade Investment which was primarily founded to manage Gates’ wealth.
Bill Gates has distanced himself from the financial markets to focus more on solving some of the biggest and existential problems humanity is facing. The billionaire waived his wages and stock compensation when he ended his board service, effective on March 13, 2021. Gates is known worldwide for his efforts against global warming, pandemics and extreme poverty. His new book titled “How to Avoid a Climate Disaster: The Solutions We Have and the Breakthroughs We Need” was launched earlier this week.
Bill & Melinda Gates Foundation Sells Uber and Alibaba
Bill & Melinda Gates Foundation recently disclosed its 13F holdings data for the fourth quarter of 2020. The fund sold its stakes in Uber Technologies Inc (NYSE: UBER), Alibaba Group Holding Ltd – ADR (NYSE: BABA) and Boston Properties, Inc. (NYSE: BXP).
Bill Gates Slashes Stakes in Apple, Amazon and Alphabet
Some notable companies in which the foundation slashed its stake include Apple (-50%), Amazon (-50%) and Alphabet (-50%).
The foundation has been one of the biggest stakeholders of Warren Buffett’s Berkshire Hathaway. However, in the fourth quarter, the foundation trimmed its stake in the company by 11%. Berkshire Hathaway still accounts for a whopping 44% of the total portfolio of the foundation.
Bill & Melinda Gates foundation significantly increased its stake in life sciences company Schrodinger Inc (NASDAQ: SDGR), upping its hold in the company by 41%.
The time held for the top 20 stocks stands around 31.65 quarters while the trust has been holding top 10 stocks for 32.30 quarters on average.
While Bill Gates’ reputation remains intact, the same can’t be said of the hedge fund industry as a whole, as its reputation has been tarnished in the last decade during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 111 percentage points since March 2017. Between March 2017 and February 5th 2021 our monthly newsletter’s stock picks returned 187.5%, vs. 75.8% for the SPY. Our stock picks outperformed the market by more than 111 percentage points (see details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
There were no new positions initiated by Bill Gates’ fund. In this article we will mostly focus on Bill Gates’ foundation’s biggest stock holdings.
Let’s start examining Bill Gates’ most recent investments:
10. Schrodinger Inc (NASDAQ:SDGR)
The life sciences and materials science company, SDGR, is the 10th biggest stock on our list of Bill Gates’ Most Recent Investments. The stock currently trades at around $101. Shares of SDGR rallied almost 22% in the last month. The foundation had a total of $552 million invested in the stock at the end of December. Baron Health Care Fund mentioned that SDGR was the best performing IPO in the entire biotechnology space in the first six months of 2020 in its 3Q investor letter:
“Schrodinger, Inc. is hybrid computer science, physics, and biotechnology company that has an established software suite allowing drug developers to explore the endless range of possible drug/target interactions allowed via the rules governing single atom interactions. Given that Schrodinger was the best performing IPO in the entire biotechnology space in the first six months of 2020, we were not surprised to see some mean reversion in the third quarter. We remain investors for both the established software business and the biotechnology development arm.”
9. United Parcel Service Inc (NYSE:UPS)
A total of 57 hedge funds tracked by Insider Monkey were long this stock as of the end of the third quarter. UPS offers a dividend yield of 2.52%. It is the ninth-largest holding of The Bill and Melinda Gates Foundation Trust, accounting for 3.41% of the overall portfolio. An insider purchased 10,100 shares at around $99 in May 2020. The stock is up 62% since then. The foundation invested a total of $762 million in the stock at the end of December.
8. FedEx Corp (NYSE:FDX)
Shares of FDX surged 54% in the last twelve months as demand for express distribution increased during the pandemic. It is the eighth-largest holding of Bill and Melinda Gates Foundation Trust, accounting for 3.51% of the overall portfolio. It ranks 8th on the list of Bill Gates’ most recent investments. A total of $785 million was invested in the company by the fund as of the end of the fourth quarter. Cartenna Capital claimed that FDX was their largest positive contributor to performance during the third quarter and they remain committed to the stock coming into the Q4. Here is what Cartenna Capital mentioned in its Q3 2020 investor letter:
“FedEx Corporation (“FDX”) was the Fund’s largest positive contributor to performance during Q3, and we remain very bullish on the entire parcel sector into Q4. When we initially purchased shares of FedEx, it represented an extremely attractive idiosyncratic opportunity embedded within our constructive transportation market outlook. For the past several years, we have generally held a negative bias on FedEx operations as they have routinely suffered from both macroeconomic headwinds (US-China trade war) and company specific issues that have been self-inflicted (i.e. lost Amazon as a customer, poor TNT acquisition/ransomware attack). However, as FedEx began their Fiscal Year 2021 in June, many of these headwinds were poised to reverse and become tailwinds. First, capacity utilization across transportation supply chains was (and still is) very high, stemming from a Covid-19 induced inflection in ecommerce spending. This dynamic has led to increased pricing power for parcel delivery services. Second, we believed that newfound capital discipline at both UPS and FedEx would allow this tight market to last for an extended period. More specifically, FDX changed their executive compensation in Fiscal Years 2021-2023 to include a 25% weighting that incentivizes capital expenditures to remain near 6% of revenue, a meaningful reduction from elevated spending in recent years. Similarly, the legendary Carol Tome came out of retirement to run UPS and used the July earnings calls to highlight capital discipline by repeatedly saying “it’s all about being better, not bigger.” Third, in Europe, FedEx recently achieved interoperability between its FedEx and TNT networks. This will allow for the two sub-scale networks to combine and achieve meaningful profit improvement. The three tailwinds cited above are just a few that we have selected from a long list of both industry and company-specific reasons to be excited about FedEx (and UPS). We have taken some profits recently but will look to build back our stake in FDX as opportunity arises.”
7. Crown Castle International Corp (NYSE:CCI)
The rest estate investment trust CCI is one of the best performing stock holdings of The Bill & Melinda Gates Foundation. It ranks 7th on the list of Bill Gates’ most recent investments. The stock offers a dividend yield of 3.28%. At the end of September, a total of 42 hedge funds tracked by Insider Monkey were long this stock. An insider recently purchased 1,500 shares at around $163 in February 2021. The stock is down 1% since then.
6. Ecolab Inc (NYSE:ECL)
The specialty chemical lab ECL ranks 6th on the list of Bill Gates’ most recent investments according to the latest fillings. ECL accounts for 4.22% of the overall portfolio of the foundation. The stock offers a dividend yield of 0.91%. The company has raised dividends in the past 28 straight years. ECL shares are up 1% in the past twelve months. At the end of September, 52 hedge funds out of 816 tracked by Insider Monkey were bullish on ECL.
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Disclosure. No position. The article Bill Gates’ Most Recent Investments is originally published on Insider Monkey.