Top 4 Mutual Fund Holders of IBM

International Business Machines Corporation (NYSE: IBM) began in 1911, from the merger of three manufacturing businesses by financier Charles Flint. At the time, the company was named The Computing-Tabulating-Recording Company and had $800,000 in net income. The company sold time clocks, computing scales, and tabulating machines, which were the precursors to calculators and mainframe computers. 

With the exception of the tabulating machines, the business was stagnant until Thomas Watson Sr. came on board as the company’s first CEO in 1914. Watson galvanized the corporate culture and spearheaded IBM’s transformation into an information technology company, capitalizing on the success of the tabulating machine. The company expanded its distribution of products globally and aptly renamed itself International Business Machines.

IBM evolved into a global information technology products and services giant. IBM’s popular cognitive technology platform “Watson” was named in recognition of Thomas Watson Sr. IBM is a component in both the Dow Jones Industrial Average (DJIA) and Standard and Poor’s 500 Index (S&P 500).

IBM reported full-year 2020 revenues of $73.60 billion, which was a decrease of 5% from 2019.Below are the top four mutual fund holders of IBM stock.

1. Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)

The top mutual fund holder of IBM is the Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX). The fund owns more than 25.20 million shares of IBM with a market value of more than $3.60 billion as of April 30, 2021.

The VTSAX provides exposure to the total U.S. stock market and has nearly $1.2 trillion in assets under management (AUM). The VTSAX has a five-year annualized return of 17.67% and an expense ratio of 0.04% as of April 30, 2021.

The VTSAX has a minimum initial investment amount of $3,000, but Vanguard also offers an exchange traded fund (ETF) called the Vanguard Total Stock Market ETF (VTI). The VTI is similar to the total market fund but only costs the price of one share as an initial investment.

2. Vanguard 500 Index Fund Admiral Shares (VFIAX)

IBM’s second-largest mutual fund holder is the Vanguard 500 Index Fund Admiral Shares (VFIAX). The VFIAX owns nearly 18.40 million shares for a market value of more than $2.60 billion as of April 30, 2021.

The Vanguard 500 provides investors with exposure to 500 of the largest U.S. companies across various sectors by tracking the Standard and Poor’s 500 Index (S&P 500). With approximately $732 billion in assets under management, the VFIAX has a five-year annualized return of 17.38% and an expense ratio of 0.04% as of April 30, 2021.

Vanguard’s VFIAX also has a minimum investment requirement of $3,000, but there’s an ETF version of the fund called the Vanguard S&P 500 ETF (VOO). The holdings within the VOO ETF are similar to the VFIAX and its initial cost is the price of one share.

3. SPDR S&P 500 ETF Trust (SPY)

The SPDR S&P 500 ETF Trust (SPY) is the first-ever ETF listed in the U.S. and remains one of the most popular to this day.

The SPY, which is managed by State Street Global Advisors, tracks the S&P 500 Index. The SPY represents the third-largest fund owner of IBM with nearly 9.20 million shares for a market value of approximately $1.30 billion as of May 13, 2021. 

With $358.4 billion in assets under management, the SPY has a five-year annualized return of 17.25% and an expense ratio of .0945% as of April 30, 2021.

4. Fidelity 500 Index Fund (FXAIX)

IBM’s fourth-largest fund owner is the Fidelity 500 Index Fund (FXAIX), which also tracks the S&P 500 Index. The FXAIX owns approximately 8.2 million shares of IBM representing slightly more than $1.09 billion in market value as of March 31, 2021.

With $328 billion in assets under management, Fidelity’s FXAIX has a five-year annualized return of 14.41% and an expense ratio of .015% with no investment minimum as of April 30, 2021.

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