Warren Buffett, Berkshire Hathaway CEO and chairman.
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Shares of the five trading firms in Warren Buffett-backed Berkshire Hathaway‘s portfolio — Itochu Corp, Marubeni Corp, Mitsubishi Corp, Mitsui & Co, and Sumitomo Corp — have surged, with one rising as much 30% in 2024.
These five names are also the biggest of Japan’s so-called sogo-shosha, or general trading companies, in which Berkshire placed big bets in 2020 and subsequently increased stakes in later years.
Japan’s trading houses, which trade in a wide range of products and materials, played a big role in Japan’s economic growth.
And they are increasingly operating as global venture capital and private equity businesses – which, for Buffett, these diversified operations could be part of the draw.
Berkshire hit a $1 trillion market capitalization on Wednesday, the first non-technology company in the U.S. to reach the milestone.
As of Thursday morning, the company was worth $994.58 billion. Shares of the Omaha, Nebraska-based conglomerate have surged 30.3% in 2024, far above the S&P 500′s 17.24% gain.
Though it holds Japanese and Chinese equities, it mostly invests in American companies, with Apple, American Express, Bank of America Corp. and Coca-Cola Co forming the bulk of its portfolio.
Here are the Asian companies which Berkshire has invested in:
Japan’s largest trading houses
Mitsubishi Corp, Itochu Corp, Mitsui & Co, Marubeni Corp and Sumitomo Corp have seen their shares surge 33.3%, 29.8%, 14.6%, 9% and 10.9% in 2024, respectively, according to LSEG data.
Berkshire raised its stakes in these top five trading firms to around 9%, the firm said in its 2023 annual report, up from 6-7% in 2022.
“Berkshire continues to hold its passive and long-term interest in five very large Japanese companies, each of which operates in a highly-diversified manner somewhat similar to the way Berkshire itself is run,” the firm wrote.
The company noted that all five companies “follow shareholder-friendly policies that are much superior to those customarily practiced in the U.S.”
“Each of the five has reduced the number of its outstanding shares at attractive prices.”
China’s largest EV maker BYD
Berkshire was an early investor in Chinese EV maker BYD, having first purchased about 225 million shares in 2008 for approximately $230 million.
That bet turned out to be extremely lucrative as the EV market saw explosive growth in China and elsewhere.
BYD’s Hong Kong-listed shares have risen about 6% this year while its Shenzhen-listed shares have surged nearly 19%.
However, the investment company has been trimming its stake in BYD, and now holds just 4.94%, according to LSEG. Nomura analyst Joel Ying in July noted intense competition in the Chinese EV market as one of the likely reasons that influenced Berkshire’s decision.
