It's no secret that there's a lot of portfolio overlap in ETFs, or that some stocks are more widely held than others. In fact, some stocks are so popular that they crop up in the holdings list of literally hundreds of ETFs.
Below are the top 10 stocks in ETFs, ranked by market value owned:
|Top 10 Most Widely Held Stocks By ETFs|
|Stock||Ticker||Total Market Value Owned ($B)||# of Shares In ETFs (M)||# of ETFs Holding The Stock||Average Market Value Owned ($M)||Biggest Holder||Largest Allocation|
|Facebook, Inc. Class A||FB||25.00||140.20||206||121.55||SPY||XLC|
|Exxon Mobil Corporation||XOM||23.50||292.90||227||104.01||XLE||XLE|
|JPMorgan Chase & Co.||JPM||22.70||200.40||197||115.67||SPY||IYG|
|Alphabet Inc., Class C||GOOG||21.30||17.70||149||142.77||SPY||XLC|
|Alphabet Inc., Class A||GOOGL||20.40||17.30||180||115.85||SPY||XLC|
|Johnson & Johnson||JNJ||20.80||162.10||208||100.20||SPY||IHE|
|Berkshire Hathaway Inc., Class B||BRK.B||19.70||99.00||156||126.57||SPY||RWW|
Perhaps unsurprisingly, this list of stocks matches very closely the top 10 companies in the S&P 500 Index, if a bit juggled in terms of weights. Exxon Mobil, for example, has the 10th-highest weighting in the S&P 500, whereas among ETFs, it's the fifth-most-widely held stock. Berkshire Hathaway, meanwhile, is the 10th-most-widely held stock by ETFs, yet it has the sixth-highest weighting in the S&P 500.
It's probably not all that surprising, then, that the largest S&P 500 ETF, the $269 billion SPDR S&P 500 ETF Trust (SPY), also holds the greatest amount by market value for almost all of these 10 stocks. The only exception is Exxon Mobil, the greatest amount of which is held by the Energy Select Sector SPDR Fund (XLE).
Sector ETFs Have Largest Allocations
To that point, the ETFs with the largest allocations to these top 10 most widely held stocks tend to be relevant vanilla sector funds, like Exxon and XLE.
The iShares U.S. Technology ETF (IYW), for example, holds the highest percentage of Apple and Microsoft stock of any ETF, at 18% and 14%, respectively. Meanwhile, the new Communication Services Select Sector SPDR Fund (XLC) holds the highest percentage of Facebook and Alphabet, at 19% and 25%, respectively, (A and C Alphabet shares, combined).
The only exception to this rule is the Oppenheimer S&P Financials Revenue ETF (RWW), which has the highest allocation of any ETF to Berkshire Hathaway. RWW is still a sector fund, but it's a smart-beta take, tracking a revenue-weighted index of large-cap financial firms.
How ETFs Are Used
As RWW shows, the top 10 most-widely held stocks don't just show up in vanilla, large-cap ETFs indexed to the S&P 500. In fact, these stocks appear in smart-beta funds, style picks, sector funds—even ESG strategies:
Tables Sources: ETF.com, FactSet; data as of Aug. 8, 2018
But even in the case of stocks for which vanilla indexed products are their primary use case, multifactor ETFs are almost always the second-most-widely used ETF strategy, beating out active management, fundamental weighting and single-factor strategies, like growth or value.
There are a few other surprises, too. The top 10 most-widely held stocks are apparently popular in equal-weighted ETFs, a weighting scheme which, by its very nature, reduces the influence of these stocks' mega-sized market caps.
Also, ESG strategies are fairly popular uses of Alphabet Class C stock (the kind originally issued to employees of the company); Alphabet appears in 13 socially responsible ETFs, or the same frequency with which it appears in growth ETFs.
Contact Lara Crigger at [email protected]