Roku, Inc. is a $6.12 billion consumer electronics and broadcast media company competing with giants like Amazon and Apple in the booming and competitive streaming business. When it comes to streaming, Netflix, Hulu, and HBO tend to make the most noise. Out of the more than 5 billion hours of TV and movies streamed by viewers in the second quarter, however, one unlikely company took the largest share at 22.1%.
Roku is perhaps best known for their device players and TVs which give viewers access to a homepage where they can subscribe to various paid and free streaming apps like Netlifx, Amazon, and Hulu. The company went public in September 2017 with an IPO of $14 per share and the company’s stock price has more than quadrupled in the year since. Roku released Q3 2018 earnings on November 7, 2018. The leader in streamed content reported $173.4 billion in revenues this quarter, up 39% from $124.8 million over the same period last year.
Here are the four largest mutual funds betting on Roku.
Vanguard Small-Cap Index Fund (NAESX)
The Vanguard Small-Cap Index Fund (NAESX) is a low-cost index fund that specializes in providing broad exposure to the small-capitalization U.S. equity market. The fund tracks an index of small-sized companies which often make up the most volatile segment of the market. The fund also has an expense ratio that is 85% lower than the average ratio of funds with similar holdings. With 1.48 million shares of Roku as of November 2018, the Vanguard Small-Cap Index Fund is the company’s single-largest mutual fund holder. The shares represent 1.40% of Roku’s total outstanding shares and account for 0.11% of the fund’s portfolio.
NAESX has $85.6 billion in total assets, a three-year annualized return of 10.27%, and an expense ratio of 0.17%.
Vanguard Total Stock Market Index Fund (VTSMX)
The Vanguard Total Stock Market Index Fund (VTSMX) is one of the largest mutual funds in the industry. The fund has an extremely low expense ratio, making it a reliable core holding for investors. As of November 2018, the Vanguard Total Stock Market Index Fund owns about 1.39% of Roku, or 1.48 million shares, which represents just 0.01% of the fund’s total assets.
VTSMX has $708.0 billion in total assets, a three-year annualized return of 11.36%, and an expense ratio of 0.14%.
Lord Abbett Developing Growth A Fund (LAGWX)
The Lord Abbett Developing Growth A Fund (LAGWX) delivers long-term capital growth by investing largely in small U.S. companies. The fund’s three largest holdings are in World Wrestling Entertainment Inc., Planet Fitness, Inc., and Insulet Corp. The fund holds 993,684 shares in Roku as of November 2018, or about 0.94% of the company. The shares account for 1.50% of the fund’s portfolio.
LAGWX has $1.9 billion in total assets, a three-year annualized return of 12.63%, and an expense ratio of 0.96%.
Fidelity Series Growth Company Fund (FCGSX)
The Fidelity Series Growth Company Fund (FCGSX) invests in companies that are believed to have above-average growth potential, or “growth stocks.” The fund has invested 0.44% of its $11.1 billion portfolio in Roku and is also invested in Juul Labs Inc., Apple (AAPL), and Amazon (AMZN). With 965,999 shares of Roku, or about 0.91% of the company, the Fidelity Series Growth Company Fund weighs in as the company’s fourth-largest mutual fund holder.
FCGSX has $11.1 billion in total assets, a three-year annualized return of 15.76%, and an expense ratio of 0.00%.