With over 1,600 exchange traded products to choose from, investors have access to nearly every corner of the investable universe. From hyper-targeted funds, to unique quant-based strategies, to plain-vanilla core building blocks, ETFs invest in essentially every type of security [see 7 Underappreciated Core ETFs].
Equity funds in particular have become increasingly popular, with investors continuing to embrace these products. Though equity ETFs have become quite large, their ownership interest in the underlying securities they hold is actually quite minimal. To illustrate this, we highlight several ETFs with large allocations to a single company and see how much of those companies each ETF actually owns.
Please note that all data is as of 7/1/2014.
|Ticker||Name||% AAPL Weight||# Shares Held of AAPL||% Ownership of AAPL|
|IYW||U.S. Technology ETF||17.76%||7,461,551||0.124%|
|XLK||Technology Select Sector SPDR||15.08%||20,536,924||0.341%|
Apple (AAPL) currently has over 6 billion shares outstanding. PowerShares’s QQQ holds the largest amount of Apple shares, but its ownership of the company amounts to only about 1%. Combined, IYW, XLK, and QQQ own less than 1.5% of Apple.
To put things further in perspective, there are only 3,410 institutional owners of Apple stock. The top institutional holder is the Vanguard Group, which owns 46,715,387 shares, or roughly 5.42% of the total shares held. In addition, there are approximately 5,000 funds that invest in Apple, the largest owners being the Vanguard Total Stock Market Index Fund and PowerShares’ QQQ.
|Ticker||Name||% T Weight||# Shares Held of T||% Ownership of T|
|FCOM||MSCI Telecommunications Services Index ETF||22.25%||412,622||0.008%|
|IXP||iShares Global Telecom ETF||14.67%||1,857,786||0.036%|
AT&T (T) has just under 5.2 billion shares outstanding. Vanguard’s Telecom ETF allocates the largest percentage of its assets to the company as well as hold the largest amount of shares among the telecom ETFs. VOX’s AT&T holdings amount to just under 0.1% of the total shares outstanding
The broad-based S&P 500 ETF (SPY) is actually one of the largest owners of the company, but its ownership represents about 0.97%. AT&T shares are held by just under 2,500 institutions, the largest being the Vanguard Group, whose ownership amounts to just over 5.0%.
General Electric Ownership
|Ticker||Name||% GE Weight||# Shares Held of GE||% Ownership of GE|
|XLI||Industrial Select Sector SPDR||10.20%||40,699,052||0.015%|
|IYJ||iShares U.S. Industrials ETF||10.04%||5,483,928||0.002%|
General Electric (GE) currently has over 265 billion shares outstanding. StateStreet’s Select Sector SPDR (XLI) currently holds the largest amount of GE shares among the industrial ETFs; its total ownership of GE, however, amounts to not even 0.02%.
As was the case with T, the largest ETF owner of GE shares is the S&P 500 ETF (SPY); its ownership represents about 0.95%. There are about 3,000 institutional owners of GE, and nearly 3,500 funds that feature allocations to the company.
|Ticker||Name||% WMT Weight||# Shares Held of WMT||% Ownership of WMT|
|RTH||Market Vectors Retail ETF||10.66%||56,569||0.002%|
|XLP||Consumer Staples Select Sector SPDR||7.26%||6,687,607||0.207%|
|FSTA||MSCI Consumer Staples Index ETF||6.72%||55,732||0.002%|
Wal-Mart Stores (WMT) has over 3.2 billion shares outstanding. StateStreet’s Consumer Staples Select Sector SPDR (XLP) holds the largest amount of shares of WMT among the retail-specific ETFs. Its ownership represents about 0.2% of the total shares outstanding. VanEck’s Market Vectors Retail ETF, which has the largest portfolio bias towards WMT, only holds 0.002% of WMT’s total shares outstanding.
The S&P 500 ETF (SPY) and the Vanguard Dividend Appreciation ETF (VIG) are actually two of the largest fund owners of Wal-Mart. Combined, their ownership of outstanding WMT shares is only 0.85%.
|Ticker||Name||% KO Weight||# Shares Held of KO||% Ownership of KO|
|XLP||Consumer Staples Select Sector SPDR||9.60%||15,683,014||0.357%|
|FSTA||MSCI Consumer Staples Index ETF||9.28%||136,593||0.003%|
|VDC||Consumer Staples ETF||8.56%||4,180,232||0.095%|
The Coca-Cola Company (KO) currently has just under 4.3 billion shares outstanding. State Street’s Consumer Staples Select has the largest weighting and number of shares held among the consumer staples ETFs. Its 15,683,014 of Coca-Cola stock represent about 0.36% of the company’s total shares outstanding.
Both the S&P 500 ETF (SPY) and the Vanguard Dividend Appreciation ETF (VIG) are the largest fund owners of Coca-Cola; the percent ownership of KO are 0.81% and 0.54%, respectively. The largest institutional owner of Coca-Cola is Berkshire Hathaway, which owns 400,000,000 shares, or 9.11% of the total shares outstanding.
|Ticker||Name||% XOM Weight||# Shares Held of XOM||% Ownership of XOM|
|IYE||iShares U.S. Energy ETF||20.67%||4,699,283||0.109%|
|FENY||MSCI Energy Index ETF||19.89%||255,358||0.006%|
ExxonMobil (XOM) currently has just under 4.3 billion shares outstanding. Vanguard’s Energy ETF (VDE) has the largest portfolio allocation to ExxonMobil; it also holds the largest amount of XOM shares among the energy ETFs. Its XOM ownership represents about 0.2% of the total shares outstanding.
The largest ETF owner of Exxon is the S&P 500 ETF (SPY), which owns over 41 million shares, or about 0.98% of the total shares outstanding. The largest institutional owners are Vanguard and State Street, which combined hold about 9.5% of the total shares outstanding.
|Ticker||Name||% COP Weight||# Shares Held of COP||% Ownership of COP|
|IEO||iShares U.S. Oil & Gas Exploration & Production ETF||13.77%||943,096||0.077%|
|FDL||Morningstar Dividend Leaders Index Fund||4.68%||413,622||0.034%|
|IYE||iShares U.S. Energy ETF||5.03%||1,343,493||0.109%|
ConocoPhillips (COP) currently has over 1.2 billion shares outstanding. iShares’ U.S. Energy ETF (IYE) holds the largest amount of COP shares, even though it does not have the largest weighting to the company. IYE’s ownership of COP is roughly 0.1%.
The S&P 500 ETF is the largest fund owner of COP; it holds over 11 million shares, which is about 1.04% of the company’s total shares outstanding. There are currently over 2,000 institutional owners of COP, and about 2,500 funds that offer exposure to the company [see Never Judge an ETF by its Name].
|Ticker||Name||% CVX Weight||# Shares Held of CVX||% Ownership of CVX|
|XLE||Energy Select Sector SPDR||12.71%||12,328,797||0.648%|
|IYE||iShares U.S. Energy ETF||11.88%||2,083,154||0.109%|
Chevron (CVX) has nearly 2 billion shares outstanding. StateStreet’s Energy Select Sector SPDR (XLE) by far holds the largest number of shares among the energy ETFs; its over 12 million shares represent about 0.65% of CVX’s total shares outstanding.
The S&P 500 ETF (SPY) holds the third largest amount of CVX shares among the over 3,500 funds that offer exposure to the company. Its shares represent about 1% of the total shares outstanding.
Wells Fargo Ownership
|Ticker||Name||% WFC Weight||# Shares Held of WFC||% Ownership of WFC|
|IYG||iShares U.S. Financial Services ETF||12.05%||1,288,265||0.024%|
|RKH||Market Vectors Bank and Brokerage ETF||10.52%||31,603||0.001%|
|XLF||Financial Select Sector SPDR||8.97%||31,469,932||0.597%|
Wells Fargo (WFC) currently has over 5.2 billion shares outstanding. The StateStreet Financial Select Sector SPDR ETF (XLF) is one of the 10 largest fund owners of WFC. Its over 31 million shares amount to roughly 0.6% of the total shares outstanding.
There are over 2,700 institutional owners of Wells Fargo, and over 3,800 funds that offer exposure to the company. The largest institutional owner of WFC is Berkshire Hathaway, which holds over 460 million shares, or about 8.8% of the total shares outstanding.
|Ticker||Name||% VZ Weight||# Shares Held of VZ||% Ownership of VZ|
|FCOM||MSCI Telecommunications Services Index ETF||21.86%||293,000||0.007%|
|IXP||iShares Global Telecom ETF||16.19%||1,482,054||0.036%|
Verizon (VZ) currently has over 4 billion shares outstanding. Vanguard’s Telecom ETF (VOX) holds the largest amount of shares among the telecom ETFs; its holdings amount to just under 0.1% of the total shares outstanding.
The ETF with the largest amount of Verizon shares is the S&P 500 ETF (SPY), which holds nearly 40 million shares, or about 0.93% of the total shares outstanding. There are currently over 2,800 institutional owners of VZ, and over 3,800 funds that offer exposure to the company.
Though equity ETFs have grown tremendously over the years, their “hold” on individual securities is really not as large as some people may think it is. By putting things in perspective, we see that the actual ownership of companies by ETFs is relatively small.
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Disclosure: No positions at time of writing.