Which Funds Declined on the Plunge in Netflix Shares?

Several mutual and exchange-traded funds with holdings in Netflix (NFLX) declined Wednesday after shares in the streaming services giant fell 35% following the company’s first quarterly decline in membership in more than a decade.

For the funds most widely held by investors the impact was minimal. The $400 billion SPDR S&P 500 ETF (SPY) fell just 0.06% on the day and has less than 0.50% of its portfolio in Netflix. The $286 billion Vanguard Total Stock Market Index (VTSAX) declined 0.11%, and Netflix represented 0.36% of its holdings as of March 31.

Netflix’s 62% plunge this year has mostly affected large-growth funds that look to invest in the biggest and fastest-growing stocks in the United States. Many growth stocks have dropped sharply this year as interest rates rise, translating into lower valuations and higher borrowing costs.

For the Russell 1000 Growth Index, a commonly used benchmark by large-growth funds, Netflix represented 0.75% of the index as of March 31. It is down 13.2% this year. The $248 billion American Funds Growth Fund of America (AGTHX) had slightly more, with a weighting in Netflix of more than 1.90% at the end of last month.

Some managers had more invested in the company. Ensemble Fund’s (ENSBX) second-largest holding was in Netflix at the end of last month with a 7.7% weighting. The fund slid 2.9% Wednesday and has dropped 19.8% this year. Portfolio manager Sean Stannard-Stockton outlined the firm’s stance on Netflix in a January note.

Sequoia (SEQUX) had a 4.32% holding in Netflix at the end of March, one of only 24 companies it is invested in. Morningstar’s Andrew Daniels wrote in a June note the fund invested in Netflix early last year following its purchase of Walt Disney (DIS) shares in the second quarter of 2020. The fund fell 2.5% on Wednesday and is down 15.6% in 2022.

It wasn’t exclusively large-growth managers placing large bets on Netflix. In the large-value Morningstar Category, Oakmark Select (OANLX) had 4.32% of its assets under management in…

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