Warren Buffett's asset allocation: cash and the 90/10 rule

Warren Buffett's 90/10 instruction concerns a family trust; Berkshire's asset allocation at 30 June 2026 included $365.5bn in cash and US Treasury bills and $323.8bn in equity securities. Berkshire's total assets were $1,263.1bn. The largest part of its balance sheet, 42.5%, is the operating businesses it controls and their other assets, carried at book value. For individual savers, Warren Buffett described a far simpler mix in his 2013 letter: 90% in a very low-cost S&P 500 index fund and 10% in short-term government bonds.

Key takeaways

1. Berkshire is mainly a group of operating businesses, then cash, then stocks. At 30 June 2026, operating and other assets were 42.5% of total assets, cash and Treasury bills 28.9% and equity securities 25.6%.
2. The listed portfolio is concentrated. Apple, American Express, Alphabet, Coca-Cola and Bank of America made up 71.9% of the $299.3bn reported 13F value at 30 June 2026.
3. The 90/10 split was an instruction for a trust, not Berkshire's allocation. Buffett wrote it as advice to the trustee of a cash bequest for his wife, in a passage addressed to non-professional investors.
4. Buffett won his ten-year bet against hedge funds. Over 2008-2017, his S&P 500 index fund gained 125.8%, against 2.8% to 87.7% for the five funds-of-funds on the other side.
5. A bond reserve cushions losses without buying crash insurance. Copio compares the reserve with cost-controlled convex protection by their effects on whole-portfolio geometric growth, with spending cash distinguished from long-term investment capital.

What does Berkshire Hathaway own?

Berkshire Hathaway owns mostly whole businesses, then a reserve of cash and Treasury bills, then a portfolio of listed shares. Its 10-Q for the quarter to 30 June 2026, filed on 10 August 2026, reports total assets of $1,263.1bn. Of that, $324.9bn was short-term US Treasury bills, $40.6bn cash and cash equivalents, $323.8bn equity securities at fair value, $19.9bn equity method investments and $17.0bn fixed maturity securities. It is the latest quarterly balance sheet filed before 27 October 2026.

At 30 June 2026: operating and other assets 42.5%; cash and Treasury bills 28.9%; equity securities 25.6%; equity method investments 1.6%; fixed maturity securities 1.3% of total assets. Source: Berkshire Hathaway 10-Q, consolidated balance sheet, page 2; chart data (CSV). Operating and other assets is the remainder after the four investment lines: plant, goodwill, receivables, inventories, loans and other assets of the businesses Berkshire controls, at book value rather than market value. The chart shows assets only, not the $512.9bn of liabilities, including insurance reserves, that sit against them.

Cash and Treasury bills were larger than equity securities at that date. Beyond Treasury bills, fixed maturity securities were 1.3% of total assets: $12.7bn of the $17.0bn in fixed maturities was foreign government debt (Note 3). Kraft Heinz and Occidental common shares, of which Berkshire owned 27.5% and 26.7%, sit in the equity method line.

Buffett has argued that the businesses matter more than the listed portfolio. In his 2024 letter he wrote that "the great majority of your money remains in equities", and that the value of the controlled businesses "remains far greater than the value of the marketable portfolio".

What are Berkshire's biggest stock holdings?

Apple was Berkshire's largest US-listed holding at 30 June 2026, at $66.0bn or 22.0% of reported 13F value. The 13F-HR for that quarter, filed on 14 August 2026, lists 26 issuers with a total value of $299.3bn. The top five issuers account for 71.9% of that value and the top ten for 91.0%. No filing for 30 September 2026 had been made by 27 October 2026.

At 30 June 2026, of reported 13F value: Apple 22.0%; American Express 17.1%; Alphabet 12.6%; Coca-Cola 10.9%; Bank of America 9.2%; Chevron 4.7%; Occidental Petroleum 4.3%; Chubb 3.9%; Moody's 3.7%; Kraft Heinz 2.6%. Source: Berkshire Hathaway 13F-HR information table, 30 June 2026; chart data (CSV). A 13F mainly covers US-listed long equities and certain listed options, filed up to 45 days after quarter end. It excludes cash, Treasury bills, most other bonds, short positions, futures, currencies, most non-US holdings and private investments, including every business Berkshire owns outright.

Non-US listings are missing too. At 31 December 2025, Berkshire owned about 10% each of Mitsubishi, ITOCHU, Mitsui, Marubeni and Sumitomo, valued at $35.4bn in total, according to the 2025 letter. None of them appears in the 13F. Berkshire's own measure, in Note 4 of the 10-Q, puts its five largest holdings at 66% of the fair value of its equity securities. Charlie Munger's Daily Journal portfolio is more concentrated still; see Charlie Munger's portfolio strategy.

What has changed since Greg Abel became CEO?

Greg Abel succeeded Buffett as chief executive on 1 January 2026, and the 13F filings for 31 March and 30 June 2026 show many exits, cuts to Chevron and Bank of America, and a large addition to Alphabet. Berkshire's 2025 annual report on Form 10-K states that major capital allocation and investment decisions are Abel's responsibility. The 13F does not say who chose each trade.

Between 31 December 2025 and 30 June 2026:

• Visa, Mastercard, UnitedHealth, Amazon, Aon, Domino's Pizza and Pool, among others, were no longer reported at 31 March 2026, and Constellation Brands was gone by 30 June.
• Chevron fell from 130.2m to 84.4m shares, and Bank of America from 517.3m to 483.4m.
• Alphabet rose from 17.8m to 106.0m shares across its two share classes.
• Delta Air Lines, first reported at 31 March 2026, reached 57.3m shares by 30 June.
• Apple stayed at 227.9m shares, after a reduction from 238.2m in the last quarter of 2025.

Over the first half of 2026, Berkshire bought $39.4bn of equity securities and sold $27.8bn, according to the 10-Q cash flow statement. It paid about $9.4bn for OxyChem on 2 January 2026 and about $6.8bn for the homebuilder Taylor Morrison on 24 July 2026. It also repurchased $4.8bn of its own shares in the first six months.

Abel's first annual letter restates long-standing principles. He wrote that "We will always aim for ownership of productive businesses over U.S. Treasuries", and that concentration in core holdings such as Apple, American Express, Coca-Cola and Moody's "will continue, with limited activity in these holdings" (page 15). Berkshire still pays no dividend while each retained dollar is reasonably likely to create more than a dollar of market value.

Why does Berkshire hold so much cash?

Berkshire holds a large Treasury bill reserve so that it can meet insurance and other obligations in any market and keep capital ready for new opportunities, according to its own letters. Its insurance businesses held $210.3bn of cash, cash equivalents and Treasury bills at 30 June 2026 (10-Q, page 38). The repurchase programme will not reduce consolidated cash, cash equivalents and Treasury bills below $30bn.

Buffett set out the rule in the 2008 letter: "We never want to count on the kindness of strangers in order to meet tomorrow's obligations." In the same passage he wrote: "When forced to choose, I will not trade even a night's sleep for the chance of extra profits." In the 2017 letter he added that during the 2008-2009 crisis Treasury bills had spared Berkshire from relying on bank lines or commercial paper.

He has also warned against cash as a destination. The 2008 letter called clinging to cash equivalents or long-term government bonds at the yields of the time "almost certainly a terrible policy if continued for long". The 2024 letter states that "Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned."

Abel's 2025 letter describes the reserve, then above $370bn, as partly required for insurance and extreme scenarios and partly "dry powder". For another investor's approach to holding cash, compare Seth Klarman's cash allocation at Baupost.

What did Buffett tell individual investors to do?

Buffett told non-professional investors to own a low-cost S&P 500 index fund, and described a 90/10 instruction for money left to his wife. In the 2013 letter he wrote that "The goal of the non-professional should not be to pick winners", and that "A low-cost S&P 500 index fund will achieve this goal." On timing, he advised accumulating shares over a long period and never selling when the news is bad and stocks are well off their highs.

The 90/10 instruction comes a few paragraphs later:

"My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's.)"

The passage gives no retirement age, investment horizon or withdrawal schedule. It concerns the trust for Buffett's wife; the same letter says his Berkshire shares will go to philanthropic organisations within ten years of his estate closing. His plan has since become more specific: on 14 July 2026 he said his remaining shares will be donated to four family foundations by 31 December 2034.

A 90% weight in the S&P 500 is also a bet on one country's large companies. The long-term portfolio guide looks at what that concentration means for a saver outside the US. Buffett's own bet table shows the index fund losing 37.0% in 2008; our crash comparison shows how other asset classes behaved in 2008 and in later crashes. David Swensen's Yale endowment model offers a contrasting institutional approach.

What did Buffett's bet against hedge funds show?

Buffett's ten-year bet showed an S&P 500 index fund gaining 125.8% over 2008-2017, while five funds-of-funds picked by Protégé Partners gained between 2.8% and 87.7%. Often called the 2008 bet, it was made on 19 December 2007, according to the 2017 letter. Buffett had publicly offered to wager $500,000 that no professional could pick at least five hedge funds that would match a low-cost S&P 500 fund over a long period (2016 letter). Only Ted Seides, co-manager of Protégé Partners, accepted.

The index fund averaged 8.5% a year, against 0.3% to 6.5% for the five funds-of-funds; one of them was liquidated in 2017. Each fund-of-funds beat the index in 2008, when the index fund fell 37.0%, but as a group they trailed it in each of the nine following years.

Buffett pointed to fees: fixed fees averaging about 2.5% of assets a year, layered across the funds-of-funds and more than 200 underlying hedge funds, which meant managers could grow very rich even if the funds lost money for their investors. His summary: "Performance comes, performance goes. Fees never falter."

Each side bought zero-coupon Treasury bonds with $500,000 of face value for $318,250; late in 2012 the two sides sold the bonds and together bought 11,200 Berkshire B shares. By November 2012 the bonds yielded 0.88% to maturity, and Buffett judged them a far worse investment than American equities. Girls Inc. of Omaha received $2,222,279. One bet covers one decade and one set of funds; it does not prove that an index fund wins in every period.

Is Buffett's 90/10 portfolio a conservative asset allocation?

Buffett's 90/10 instruction leaves most capital exposed to stock-market losses and keeps a short-term government-bond reserve. The reserve cushions equity losses by keeping some capital outside stocks and provides money that can be spent without selling them. It does not generate an equity-crash insurance payout. The 37% loss in Buffett's bet concerns the index fund in 2008, not a calculated return for the 90/10 mix.

Copio shares the emphasis on productive assets and low costs, with an explicit objective of maximising expected long-term geometric growth within the investor's constraints. For capital available for long-term investment, we compare a permanent reduction in equity exposure with a growth portfolio supported by cost-controlled convex protection. The latter must justify its premiums and implementation costs through better expected compounding of the whole portfolio. Our conservative portfolio allocation guide keeps that comparison separate from cash required for near-term spending.

What can an individual investor learn from Warren Buffett?

Berkshire combines controlled businesses, insurance liabilities and listed investments on a scale that a household portfolio cannot reproduce.

• What share of the portfolio sits in its five largest holdings, and is that concentration a deliberate choice? Berkshire's top five issuers were 71.9% of its reported 13F value.
• Does the cash have a job, such as known obligations or a planned purchase, or is it simply undecided money?
• What is the total yearly cost across funds, wrappers and advice, and what has it bought? Buffett's bet put fees at the centre.
• Could the holder maintain the allocation through a severe equity decline? The index fund in Buffett's bet lost 37% in 2008; that was not the return of a 90/10 portfolio.
• How much of the equity exposure depends on a single country?

Our guide to diversification and asset-class correlations helps with the last question. For other managers in this series, see Ray Dalio's All Weather portfolio.