The Top 10 Holders of Values ETFs

Passive ownership of the S&P 500 has doubled in the past seven years, with 21% of market capitalization of the average company now in passive ETFs and funds. 

Yes, that means passive investors now own a fifth of each company in the S&P 500. 

When looking at the sub-asset classes, the top five companies in the Russell 1000 Growth index make up 40% of the index. Compare this to the Russell 1000 Value index where the top five holdings makeup only 11% of the index. 

The positive is that broad indexing is certainly resonating with investors. The negatives are the inefficiencies created with stock prices being more inelastic to supply and demand in both directions and the impact that market cap weighting has had. 

We have clearly seen this on display during 2020-2021, as growth stocks were outperforming all other styles and factors. One example is Tesla rising over 700% in 2020 as it was added to the S&P500, making its market cap worth more than the combined value of the nine largest traditional automakers globally. Now in 2022, this growth outperformance and subsequent mega-cap growth weighting is working in reverse as the extended valuations normalize. 

At the close of May, growth investments had unraveled against the backdrop of persistently high inflation, and an abruptly hawkish Federal Reserve. At the same time, the S&P 500 Pure Value Index is up nearly 5%, outperforming the S&P 500 by 18%, and outperforming its pure growth equivalent by 27% year-to-date ending 5/31/22.

(source: Morningstar 6/2/2022)

In this article, we’re sharing the trends we’ve been seeing, as well as the top ten holders of Values ETFs in 2022 so far.

First, we’ll jump into the trends we’ve found among the 13F data within Dakota Marketplace.

From a flow perspective, our 13F data showed us that much of the groundwork was being laid before this performance shift. 

Three main things jump started the flows we saw among allocators at the beginning of Q3 last year:

  • the end of near zero rates and down trend in bond yields
  • inflation began to resurface as our economy reopened last year
  • many of the sectors within value have strong current cash flows, and investors began to place a higher level of importance on current cash and the ability to raise prices VS the promise of future cash flows 

The combination of these factors caused allocators to shift into the value ETF space at the fastest pace we have seen since 2018. High-level, we saw over a 400% increase in ETF flows from Q3 to Q4 into value. This moderated from Q4 2021-Q1 2022 to a 67% gain, which is still massive.  Peeling this back a bit, the areas in value which attracted the most were mid cap value and SMID value as opposed to large cap… more than likely given their operating leverage that allocators were looking for and many commodity related companies reside in these market caps

In terms of product style, ETFs which had exposure to the value factor and funds which focused on dividends/cash flows were also favored as the MP data showed us, among other smart beta strategies which focused on cash flows. 

While we have seen fits/starts in the rotation into value among allocators over the past decade, and fits and starts in value outperformance over growth, does anything make this rotation more durable?  From what allocators are saying, yes, as they point to two main themes:

  • The days of nominal zero rates are a thing of the past for now and that inflation could stay elevated for a while, both of which create a tailwind for value.  
  • Less of a value VS growth conversation for them these days, but more of owning both.  It is not that value’s performance has been horrible over the trailing 10 years, it is more that growth has outperformed that much more on a relative basis and now those tailwinds are fading.  

This chart from Touchstone gives us a nice historical look that even after the value catch up we have had to grow over the past quarter or so, we still have some room to go to get to the average VS growth.


Next we’ll outline the top ten Value ETF holders so far in 2022.

  1. The Sade Group Private Wealth Management: $5,917,000,000 (49,460 shares  iShares Russell Mid-Cap Value ETF) 
  2. The Sade Group Private Wealth Management: $5,357,000,000 (94,801 shares FlexShares Quality Dividend Defensv ETF) 
  3. Bank of America Merrill Lynch: $5,238,758,000 (31,562,588 shares iShares Russell 1000 Value ETF)
  4. Morgan Stanley: $4,901,576,000 (29,531,123 shares iShares Russell 1000 Value ETF)
  5. The Sade Group Private Wealth Management: $4,461,000,000 (160,059 shares First Trust SMID Cp Rising Div Achv ETF)
  6. The Sade Group Private Wealth Management: $3,999,000,000 (56,714 shares First Trust Large Cap Val AlphaDEX® ETF)
  7. The Sade Group Private Wealth Management: $3,563,000,000 (70,099 shares Fidelity® Value Factor ETF)
  8. The Sade Group Private Wealth Management: $2,904,000,000 (42,944 shares Vanguard Intl Hi Div Yld Idx)
  9. Envestnet: $2,680,098,000 (53,324,662 shares iShares MSCI EAFE Value Index)
  10. J.P. Morgan Private Bank: $2,677,648,000 (17,195,276 shares iShares S&P 500 Value ETF)

For more information on ETF holdings and a library of 13F filing information, we’d love to offer you a free trial of Dakota Marketplace!

New call-to-action

Written By: Gui Costin, Founder, CEO

Gui Costin is the Founder and CEO of Dakota.