Warren Buffett’s Berkshire Hathaway has amassed $234.6 billion worth of short-term investments in U.S. Treasury bills, according to the conglomerate’s second-quarter earnings report released on Saturday.
Berkshire’s acquisition of $229.5 billion in Treasury bills and fixed maturity securities in the first half of the year has surpassed the Federal Reserve’s holdings, which stood at $195.3 billion as of last week.
Buffett has long been a proponent of Treasury bills. At the annual Berkshire conference in May, the 93-year-old investor referred to them as “the safest investment there is.”
Join me on Saturday at 10a ET for the first ever #BRKLiveStream on @YahooFinance https://t.co/u2wsogF7zn pic.twitter.com/RPKqhniVTD
— Warren Buffett (@WarrenBuffett) April 29, 2016
Treasury bills are short-term securities issued and backed by the U.S. government, with maturities ranging from four weeks to 52 weeks and a minimum purchase amount of $100. They increase in value to pay off their full face value at maturity.
While returns on Treasury bills are typically lower than those from more risky investments like stocks, the current interest rates set by the Federal Reserve have made them more attractive. As of August 2, three-month bills offered a 5.05% return rate, six-month bills were at 4.68%, and 12-month bills brought in 4.18%.
Berkshire’s earnings report also revealed that it has halved its stake in Apple, now holding $84.2 billion in the iPhone-maker’s stock, down from $174.3 billion at the start of the year. The company has been reducing its Apple stake for three consecutive quarters. Nevertheless, Apple remains Berkshire’s largest stock investment, followed by Bank of America Corporation ($41.1 billion) and the American Express Company ($35.1 billion) as of June 30. Buffett also sold nearly $4 billion in Bank of America stock over a 12-day period late last month.
With these substantial stock sales totaling roughly $75 billion, the “Oracle of Omaha” has grown his cash reserves to a record $276.9 billion last quarter, the filing showed.
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