Want To Invest Like Bill And Melinda Gates? Try This ETF | Investing.com


The Bill & Melinda Gates Foundation is among the largest private philanthropic foundations worldwide. Established in 2000, it defines its primary objective as to:

“Help all people lead healthy, productive lives.”

As a separate entity, the Bill & Melinda Gates Foundation Trust manages the investments of the foundation’s assets. With a portfolio valued at around $23 billion.

“The Foundation Trust holds the endowment, including the annual installments of Warren Buffett’s gift, and funds the foundation… Because Bill and Melinda believe the right approach is to focus the foundation’s work in the 21st century, we will spend all of our resources within 20 years after Bill’s and Melinda’s deaths.”

InvestingPro provides a detailed breakdown of the trust’s holdings, which could inspire potential investors. Readers can also follow the most recent Form 13F filing with the US Securities and Exchange Commission (SEC).

Examples Of Stocks Held By The Bill & Melinda Gates Foundation

As of the end of December 2021, the trust held 22 stocks. Warren Buffet’s Berkshire Hathaway (NYSE:) (NYSE:) leads the names on the roster with more than 33 million shares valued at over $10 billion.

In terms of the number of shares held, other leading names include Waste Management (NYSE:), Canadian National Railway (NYSE:), Caterpillar (NYSE:), Walmart (NYSE:), and healthcare-focused software names Schrodinger (NASDAQ:) and others.

In terms of market capitalization (cap), Microsoft (NASDAQ:) leads the holdings in the portfolio, followed by Alphabet Class A (NASDAQ:) and Class C (NASDAQ:), as well as Berkshire Hathaway, Walmart, and United Parcel Service (NYSE:).

For readers who want to know which shares offer the best fundamental value, we can highlight that FedEx (NYSE:), Berkshire Hathaway, and the outdoor cooking company Weber (NYSE:) trade below estimates of intrinsic value.

InvestingPro also lists stocks according to analysts’ price targets. In other words, the foundation trust holds several names that could potentially see significant upside from their current price levels. They include Schrodinger; Switzerland-based premium performance-sports brand On Holding (NYSE:); South Korean e-commerce services provider Coupang (NYSE:); Mexico-based media giant Grupo Televisa (NYSE:); Fedex; and live sports and entertainment giant Madison Square Garden Sports (NYSE:).

Finally, passive income seekers would be interested to know that the trust holds several dividend-paying names, such as the franchise bottler Coca-Cola Femsa (NYSE:); United Parcel Service; and infrastructure real estate investment trust (REIT) Crown Castle International (NYSE:).

Understandably, picking stocks among those held by the Bill & Melinda Gates Foundation could mean considerable research on the part of retail investors. Thus, one possibility is to invest in Berkshire Hathaway shares that comprise over 40% of the portfolio.

An alternative for many retail investors could be to buy an exchange-traded fund (ETF) that holds a number of those shares. Today’s article introduces such a fund.

Industrial Select Sector SPDR Fund

  • Current Price: $100.16
  • 52-week range: $93.40-$107.88
  • Dividend yield: 1.37%
  • Expense ratio: 0.10% per year

Close inspection of the trust’s holdings shows that the Bill & Melinda Gates Foundation emphasizes industrial companies. Therefore, the Industrial Select Sector SPDR Fund (NYSE:) could be appropriate for buy-and-hold investors. It provides exposure to a broad range of US companies from the industrial sector of the . The ETF started trading in December 1998.

XLI, which tracks Industrial Select Sector Index, has 73 holdings. In terms of sub-sectors, we see aerospace & defense (20.4%), machinery (19.8%), industrial conglomerates (12.5%), road & rail (11.6%), and air freight & logistics (7.7%), among others.

The top 10 stocks account for more than 40% of the fund’s net assets of $15.8 billion. In other words, it is a concentrated fund.

Leading holdings in the portfolio include the railroad operator Union Pacific (NYSE:); aerospace & defense heavyweight Raytheon Technologies (NYSE:); United Parcel Service; software and industrial group Honeywell International (NASDAQ:); and Caterpillar.

XLI is down close to 5.3% year-to-date but nearly flat over the past 12 months. The ETF hit a record high in early January. Yet, with many stocks coming under pressure amid the recent market turmoil, it also saw a 52-week low on Feb. 24.

The fund currently trades at 19.99 times trailing earnings and 4.66x book value. Potential investors who believe that the investment strategy of the Bill & Melinda Gates Foundation could help create long-term shareholder value should research the fund further.



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