Want to know who owns Corporate America? It's not Bill Gates or Elon Musk. It's Vanguard.
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Thanks to the surging popularity of its index funds, Vanguard is now the No. 1 owner of 330 stocks in the S&P 500, or two-thirds of the world's most important collection of stocks, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. No other investor comes remotely close. BlackRock (BLK) is a remote second-top owner, ranking as the No. 1 investor in just 38 S&P 500 companies.
This fact underscores just how powerful the ETF and mutual fund powerhouse has become in markets. Its inflow of funds from investors stand to sway markets miles beyond most other forces.
"BlackRock plus Vanguard consistently take in about 64% of all the cash which is in line with their (asset under management) market share, said Eric Balchunas, ETF senior analyst at Bloomberg. "(And there's) no slowing down the duopoly despite the onslaught of competition from some pretty massive companies."
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Vanguard And The Dwarfs
It's hard to understate just how much of a force Vanguard is in markets. The ETF market shows its dominance the most clearly.
So far this year, investors poured $124.3 billion into Vanguard ETFs, or more than a third of the total, Balchunas says. BlackRock is second with inflows of just $89.6 billion, or 27%. And that's just in ETFs. Keep in mind Vanguard is also the largest provider of mutual funds.
All told Vanguard controls total assets of $4.6 trillion, or 26.4% of the fund family universe, Morningstar says. That's No. 1 by far. Fidelity is a distant No. 2 in terms of total fund assets at $2.3 trillion, or 12.9% of the total.
Vanguard's dominance is putting it into an extreme position of power at many S&P 500 companies.
Where Vanguard Places Its Biggest Bets
Thanks to Vanguard's massive asset base, it's the voice that matters most among investors. And it holds huge sway in the real-estate sector. All 10 of the companies Vanguard holds the largest positions in are in the real estate sector.
The fund company owns 15% or larger stakes of more than 20 companies in the S&P 500. Its very top position based on the percentage of company owned is real estate firm CBRE Group (CBRE). Vanguard owns nearly 17% of the company. BlackRock is the No. 2 holder with 10.2% of the company. The stock, this year, though hasn't worked out all that well for Vanguard. Shares of the company are down 20% this year.
CBRE, though, is a classic type of stock institutions like. It's in the relatively stable commercial real estate business. The company's profit is expected to rise every year from 2022 through 2026. This year, profit is seen rising more than 8% to $6.29 a share. Analysts rate the stock an outperform. They think the stock will be worth 100.63 a share in 12 months, or nearly 16% more than it is now.
Vanguard is also the biggest wheel at Extra Space Storage (EXR). The fund company owns 16.7% of the real estate firm. It's also an institutional style company like CBRE. The Salt Lake City real estate company runs nearly 2,000 self-storage centers in 40 U.S. states. It's a steady-as-it-goes business, too. Profit is seen rising every year from 2022 through 2025. And the stock is holding up better than many. It's down just 6.8% on the year and yields 2.9%.
Is Vanguard always right? Not even close. But when the market has a participant of this size, you need to pay attention to it.
S&P 500 Companies Vanguard Owns The Most Of
| Company | Symbol | Vanguard's % owned | Stock YTD % ch. | Sector |
|---|---|---|---|---|
| CBRE Group | (CBRE) | 16.9% | -19.7% | Real Estate |
| Extra Space Storage | (EXR) | 16.7 | -6.7 | Real Estate |
| Iron Mountain | (IRM) | 16.6 | 3.1 | Real Estate |
| Mid-America Apartment Communities | (MAA) | 16.4 | -18.2 | Real Estate |
| Essex Property Trust | (ESS) | 16.3 | -15.8 | Real Estate |
| AvalonBay Communities | (AVB) | 16.3 | -13.6 | Real Estate |
| Weyerhaeuser | (WY) | 16.3 | -10.5 | Real Estate |
| Host Hotels & Resorts | (HST) | 16.3 | 12.0 | Real Estate |
| Ventas | (VTR) | 16.3 | 2.4 | Real Estate |
| SBA Communications | (SBAC) | 16.3 | -10.1 | Real Estate |
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
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