Inside the Gates Foundation's $38 Billion Portfolio: Three Unglamorous Stocks Dominating a Billionaire's Investment Strategy

The Philosophy Behind Conservative Wealth Management

When discussing the net worth of prominent figures and how they deploy capital strategically, few cases are as instructive as the Gates Foundation trust. Bill Gates built his legendary wealth through Microsoft, which propelled his net worth beyond $100 billion at the turn of the century. Yet today, his financial focus has shifted dramatically—he’s committed to giving away nearly all his wealth over two decades through his philanthropic vehicle.

The foundation’s investment portfolio tells a fascinating story. Worth approximately $38 billion according to recent SEC filings, it reveals the profound influence of Warren Buffett, Gates’ long-time confidant and former foundation trustee. This portfolio isn’t flashy. Instead, it embodies a timeless investing principle: predictable, cash-generative businesses with durable competitive advantages.

Three Stocks Control 59% of the Foundation’s Assets

The concentrated nature of the foundation’s holdings is striking. Three companies account for nearly three-fifths of its invested capital. This concentration isn’t accidental—it reflects a deliberate conviction that certain businesses, despite their mundane nature, offer unmatched returns through economic moats and pricing power.

Berkshire Hathaway: 29.1% of Holdings

The largest position is unsurprising: Berkshire Hathaway, commanding roughly 29% of the portfolio worth approximately $10.9 billion. This holding stems from Buffett’s annual donations of his own company’s shares—a relationship that speaks to both friendship and investment philosophy alignment.

The foundation holds around 21.8 million Class B shares. While the conglomerate’s leadership transition to Greg Abel raised investor questions, Berkshire remains formidable. Its $670 billion in investable assets span equities, Treasury instruments, and cash, undergirded by dozens of wholly-owned subsidiaries developed over six decades.

What matters most: Berkshire’s insurance operations continue generating fortress-like cash flows. The balance sheet strengthens quarterly. Since Buffett’s retirement announcement in May, the stock price has stagnated—creating what value investors call opportunity. Trading at a price-to-book ratio near 1.5, it’s reasonably valued for a company that converts operations into persistent free cash flows.

WM: 16.7% and the Unsexy Moat

Waste Management might seem an odd choice for a tech billionaire’s foundation, yet it exemplifies Buffett’s investment playbook. This 16.7% position demonstrates how “boring” truly builds generational wealth.

WM’s competitive advantage is nearly unassailable. The company operates over 260 landfills and coordinates 260+ transfer stations—barriers to competition are regulatory and capital-intensive. Competitors, lacking such infrastructure, must use WM’s services. This creates perpetual pricing power.

The numbers reflect this strength. WM expanded revenue while margins improved throughout 2024 and into 2025, despite headwinds in recycling prices and renewable energy valuations. Management leveraged its dominant position to raise rates systematically across residential, commercial, and industrial clients.

Recent strategic moves amplify future returns. The Stericycle acquisition created WM Healthcare Solutions, opening lower-margin but scalable revenue streams. As management integrates medical waste with core operations, margin expansion becomes inevitable through synergy and scale.

At an enterprise value-to-EBITDA ratio below 14, the stock remains attractively priced for an industry leader positioned for steady organic growth, pricing increases, and acquisition-driven expansion.

Canadian National Railway: 13.6% and Geographic Advantage

The final pillar—accounting for 13.6% of the portfolio—is Canadian National Railway, another “slow-growth” business that generates enormous value for patient capital.

CNR’s strategic positioning is its moat. Tracks spanning coast-to-coast through Canada and extending into the United States through New Orleans create geographic monopolies for freight movement. Even when markets shift—like when Trump tariffs initially threatened metals and minerals revenue—management offset declines by capturing growth in petroleum, chemicals, grain, coal, and fertilizers.

The railroad industry’s structural advantages are profound. New entrants face impossible hurdles: acquiring track rights, purchasing rolling stock, and securing long-term freight contracts before operations begin. Existing players, consolidated through decades of consolidation, control capacity with minimal competition.

While total volume growth averaged just 1% annually from 2020-2024 and flattened through September 2025, pricing power compensated. More important: management has engineered superior free cash flow metrics. Nine months into 2025, free cash flow surged 14%, with management projecting further improvements as capital expenditure efficiency improves in 2026.

Trading at an enterprise value-to-EBITDA below 12—lower than industry peers—CNR offers attractive long-term value. Free cash flow generation funds share repurchases, mechanically expanding earnings per share while requiring minimal capital reinvestment relative to revenue.

Why Billionaires and Foundations Choose Economic Moats

The pattern across these three holdings reveals something profound: concentrated capital flows toward businesses that control pricing and resist competition. These aren’t technology disruption plays. They’re not growth stories. Instead, they’re predictable, resilient engines generating consistent cash returns.

This approach to deploying tens of billions mirrors how the world’s most sophisticated investors think. When Kevin Gates discusses net worth accumulation or financial strategists examine wealth preservation, they inevitably highlight the same principle: sustainable advantages compound wealth more reliably than speculative growth.

The Gates Foundation’s portfolio demonstrates that billions aren’t deployed chasing returns. Instead, they’re allocated to businesses where competitive dynamics ensure that raising prices doesn’t destroy demand, where regulatory environments erect barriers against rivals, and where scale creates perpetually advantageous economics.

For patient investors, this concentration in three stocks within a $38 billion portfolio isn’t recklessness—it’s conviction backed by decades of evidence.