:max_bytes(150000):strip_icc():format(jpeg)/istock_000017850461_medium_1-5bfc3af946e0fb00511dcd83.jpg)
Bank of America Corporation (BAC) is the second-largest bank in the United States, behind JPMorgan Chase (JPM) but ahead of Wells Fargo (WFC), Citigroup (C), and U.S. Bancorp (USB).
For fiscal year 20201, Bank of America held $3.2 trillion in assets. It reported $89.1 billion in revenue net of interest expenses and had a market capitalization of $359 billion at the end of 2021.
Key Takeaways
- The Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) is the largest mutual fund holder of Bank of America, owning 219.4 million shares, which accounts for 2.54% of the bank’s total shares.
- Bank of America is the second-largest bank in the United States by assets, surpassing Wells Fargo, Citigroup, and U.S. Bancorp, with assets totaling $3.2 trillion as of 2021.
- The SPDR S&P 500 ETF (SPY) holds 78.8 million shares of Bank of America, representing 0.68% of the fund’s total assets, highlighting the bank’s inclusion in major financial indices.
- XLF, the Financial Select Sector SPDR ETF, offers targeted exposure to large U.S. banks and holds 76.5 million shares of Bank of America, making it the fourth-largest mutual fund holder.
- Berkshire Hathaway, led by Warren Buffett, is the largest shareholder in Bank of America, with a 12.59% stake, demonstrating the bank’s appeal among significant institutional investors.
| The top fund holders of Bank of America (As reported Q1 2021) | |||
|---|---|---|---|
| Holder | Shares | % Out | $ Value |
| Vanguard Total Stock Market Index Fund | 219,434,757 | 2.54% | 6,651,067,484 |
| Vanguard 500 Index Fund | 152,541,798 | 1.77% | 4,623,541,897 |
| SPDR S&P 500 ETF Trust | 78,815,640 | 0.91% | 3,049,377,111 |
| Select Sector SPDR Fund-Financial | 76,557,000 | 0.89% | 2,961,990,330 |
The Vanguard Total Stock Market Index Fund (VTSAX)
Vanguard index funds are designed to provide exposure to the entire U.S. equity market, including small-cap, mid-cap, and large-cap companies, whether growth or value. The Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) is the single largest mutual fund holder of Bank of America, owning 219.4 million shares or 2.54% of the company and 0.56% of the fund’s portfolio.
As of Q1 2021, the Vanguard Total Stock Market fund held $240.4 billion in assets, with a 0.04% management fee and a $3,000 minimum investment. VTSMX returned 17.47% annually in the five years through April 2021, compared with 17.40% for its benchmark, the CRSP US Total Market Index.
Exploring the Vanguard S&P 500 Fund (VFIAX) and Its BAC Holdings
The Vanguard S&P 500 Fund (VFINX) closely tracks the S&P 500 Index, and it is the second-largest mutual fund holder with 152.5 million shares of BAC, or 1.77% of the company, as of the third quarter of 2020. VFIAX is the industry’s first index fund for individual investors. Over 98% of its assets are invested in U.S. stocks covering a diversified spectrum of the largest U.S. companies, mirroring the S&P 500. Bank of America shares represent less than 1% of Vanguard 500’s $221 billion portfolio.
How the SPDR S&P 500 ETF Trust (SPY) Invests in Bank of America
This popular ETF offers exposure to large-cap U.S. stocks with the goal of generating returns that generally correspond to the price and yield performance of the S&P 500 Index. As of Q1 2021, the fund held $357.3 billion in assets. SPY has an expense ratio of 0.095%. It returned 17.03% annually in the five years through April 2021.
As of Q1, 2021, SPY held 78.8 million BAC shares for a market value of $3 billion. Bank of America represented 0.68% of the fund’s total assets.
The Financial Select Sector SPDR ETF (XLF) and Its Significant BAC Stake
XLF offers efficient exposure to the heavyweights in the US financials segment. Its cap-weighted, S&P 500-only portfolio means that it’s concentrated in large banks and avoids small-caps. For many investors and traders, XLF has been the go-to ETF for financials exposure, though there are more comprehensive funds out there for long-term exposure.
As of Q1 2021, XLF held 76.5 million shares of BAC, making it the fourth-largest fundholder.
Frequently Asked Questions
Who Owns Bank of America?
Berkshire Hathaway, the conglomerate run by Warren Buffett, is the largest shareholder in Bank of America. The conglomerate has a 12.59% stake in the bank, comprising more than one million of its stock shares.
How Does Bank of America Make Money?
Bank of America’s biggest money-maker is its retail banking operations, including consumer bank deposits and loans to individuals and businesses. It has separate divisions that provide a range of investing and financial services for high-net-worth individuals, corporate financial services, and governments. Its fastest revenue growth in 2021 was in global banking. It currently has operations in about 35 countries.
Is Bank of America the Biggest U.S. Bank?
Bank of America is the second-biggest U.S. bank when ranked by total assets. The top five U.S. banks and their approximate total assets are as follows:
- JPMorgan Chase, $3.0 trillion
- Bank of America, $2.3 trillion
- Wells Fargo, $1.8 trillion
- Citibank, $1.7 trillion
- US Bank National Association, $540 billion
The Bottom Line
Who cares which stocks mutual funds buy? When you are considering whether to buy (or sell) a stock, it’s interesting to see where mutual funds are putting their money.
And it’s always interesting to find out where Warren Buffett is putting his money. In this case, he’s put enough money in Bank of America that Berkshire Hathaway essentially bought the bank.
