With news breaking that Broadcomm (AVGO) is exploring making a deal to buy Qualcomm (QCOM), it’s an exciting time for the chip maker, who also is in the process of an acquisition. Qualcomm is trying to close out a deal to acquire NXP Semiconductors NV for $37 billion. If Broadcomm goes through with a deal, it would be the largest ever takeover of a chip maker.
According to Qualcomm Inc.’s (NASDAQ: QCOM) Jan. 19 proxy statement, its largest beneficial shareholder was BlackRock Inc. (NYSE: BLK) with 107 million shares, 7.1% of the outstanding shares. Vanguard Group Inc. was the second-largest beneficial holder with 101 million shares, or 6.74% of outstanding shares. While Blackrock’s Qualcomm holdings are spread among several investment vehicles and funds, Vanguard’s are more concentrated in its larger mutual funds. Two of Vanguard’s funds make up the top two mutual fund investors in Qualcomm, with the ever-present SPY coming in at #3.
Vanguard Total Stock Market Index Fund (VTSMX)
As of Nov. 1, the Vanguard Total Stock Market Index Fund (“VTSMX”) held 35,047,883 shares of Qualcomm, worth $1.8 billion. The Vanguard Total Stock Market Index Fund was launched in 1992 and is designed to give investors broad exposure to the entire U.S. equity market. All market capitalizations are represented. The fund’s advisor is the Vanguard Equity Investment Group, and it has been managed by Gerard C. O’Reilly since December 1994. The fund’s minimum investment is $3,000.
As of Nov. 1, the fund held 3,600 different stocks, with 15.3% of the portfolio concentrated in the 10 largest positions. U.S. equities make up 97.73% of the fund’s assets. The fund is most heavily exposed to technology sector, at 19.81% of the total value, followed by financial services at 16.4% and then healthcare at 14.1%. Morningstar rates the Vanguard Total Stock Market Index at average risk in its category, with above average returns. At 0.15%, the fund’s expense ratio is substantially lower than the average of the peer group.
Vanguard 500 Index Fund (VFINX)
As of Nov. 1, the Vanguard 500 Index Fund (VFINX) held 23,883,366 shares of Qualcomm, which is worth $1.2 billion. The fund was launched in 1976 with the expressed goal of providing investors exposure to the 500 largest U.S. companies. The fund advisor is Vanguard Equity Investment Group, and it has been managed by Michael H. Buek since December 1991. The fund’s minimum investment threshold is $3,000.
As of Nov. 1, the Vanguard 500 Index Fund held 506 different stocks. The 10 largest positions accounted for 18.9% of the total fund value. By taking positions on the 500 largest U.S. equities, the fund is exposed to a broad range of sectors and industries. Information technology represented 20.7% of the fund’s total holdings, while financials accounted for 16.5% and health care 14.8%. Relative to its category, Morningstar rates the Vanguard 500 Index Fund average risk and above-average return, resulting in a four-star overall rating. Like Vanguard’s Total Stock Market Index Fund, the 500 Index Fund has an expense ratio of 0.14%, which is significantly lower than the category average.
SPDR S&P 500 ETF (SPY)
As of Nov. 1, the SPDR S&P 500 ETF held 16,973,632 shares of Qualcomm, worth $880 million. Launched in 1993, the fund seeks to track the S&P 500 as accurately as possible, providing results that correspond to the performance of the S&P 500. There is no fund manager, as it is an automated fund.
As of Nov. 1, SPY held 506 stocks, with assets in the top 10 holdings accounting for 20.02% of the total ETF value. 98.5% of SPY’s assets are US stock. The largest sector SPY is invested in is technology, with 21.7% of its stock dedicated to the area, followed by financial services, with 16.7%. Relative to the category, Morningstar rates SPY as average risk, above average return, giving it a four-star overall rating. SPY has a net expense ratio of 0.10%, well below the category average.
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