Zero Tech in the Top 5: How Dodge & Cox Built a $185B Portfolio That Ignores Silicon Valley

While most institutional giants load up on NVIDIA, Apple, and Microsoft, Dodge & Cox quietly built a $185 billion portfolio where not a single pure-tech company cracks the top five. Their largest holdings? A brokerage (Charles Schwab), a building technology firm (Johnson Controls), a defense contractor (RTX Corp), a pharmacy chain (CVS Health), and a logistics company (FedEx). In an era where the Magnificent Seven dominate headlines, this 95-year-old San Francisco firm is betting that the best returns come from the sectors everyone else ignores.

TL;DR

• Zero pure-tech in the top 5: SCHW, JCI, RTX, CVS, and FDX lead the $185.3B portfolio — financials, industrials, healthcare, and logistics dominate
• Financials are king (~20%): Schwab, MetLife, Wells Fargo, Bank of NY Mellon, Goldman Sachs, and State Street form the backbone
• Healthcare is the second pillar (~15%): CVS, Regeneron, Gilead, UnitedHealth, Cigna, and GSK anchor a deep bench of pharma and managed care
• New $1.9B Brookfield position: The biggest Q4 move — a brand-new stake in alternative asset manager Brookfield Corp (BN)
• Tech is present but underweight (~12%): Alphabet (combined ~4%), Microsoft (1.9%), Amazon (1.9%), and Meta (1.9%) are held but never overweighted
• AUM steady at $185.3B: Q4 performance of +1.98% — modest but consistent with a value-first approach
• Value vs. Growth gap is historic: Russell 1000 Growth trades at 28.8x vs. Value at 16.1x — Dodge & Cox is positioned for a potential reversion

Filing Snapshot: Q4 2025

Metric	Value
Filer	Dodge & Cox
CIK	0000200217
Quarter	Q4 2025
Total AUM	$185.26 billion
Number of Holdings	222
Q4 Performance	+1.98%
Founded	1930 (San Francisco)
Style	Deep value, long-term, research-driven

Top 10 Holdings

The portfolio's largest positions tell a clear story: Dodge & Cox buys what generates cash flow today, not what might dominate tomorrow. Charles Schwab at 4.4% leads the pack — a bet on rising interest income and brokerage consolidation. RTX Corp (3.9%) and Johnson Controls (3.0%) reflect conviction in defense spending and smart building infrastructure. CVS Health (2.8%) and FedEx (2.6%) round out a top five that would look more at home in a 1990s portfolio than a 2025 one.

Sector Allocation: Where the Money Really Goes

Dodge & Cox's sector allocation is the inverse of what you'd see at most large-cap growth funds. Financials command roughly 20% of the portfolio, healthcare takes 15%, and industrials claim 14%. Technology — the sector that dominates the S&P 500 at nearly 32% — sits at just 12% here. Energy (5%), media/telecom (6%), and consumer stocks (4%) fill out the rest.

This isn't accidental. Dodge & Cox's investment committee has consistently argued that the best opportunities lie in sectors where sentiment is poor but fundamentals are improving. Financials, hammered by the 2023 regional banking crisis, have rebounded strongly. Healthcare, pressured by political rhetoric around drug pricing, trades at multi-year low multiples. Industrials benefit from reshoring trends and infrastructure spending that the market hasn't fully priced in.

Why Financials Dominate

With roughly 20% of AUM in financial services, Dodge & Cox is making one of the biggest sector bets among large institutional holders. The thesis is multi-layered:

• Charles Schwab ($5.2B, 4.4%): The largest position benefits from higher net interest margins and the post-TD Ameritrade integration driving operating leverage. Schwab's move to custody trillions in client assets creates a durable revenue stream.
• MetLife ($3.0B, 2.5%): A classic value play — life insurers benefit from higher rates on their massive bond portfolios while trading at single-digit P/E ratios.
• Wells Fargo ($2.1B, 1.8%), Bank of NY Mellon ($2.2B, 1.9%), Goldman Sachs ($1.1B, 0.9%): A diversified mix of consumer banking, custody services, and investment banking — each trading well below historical valuation ranges.
• Fiserv ($2.1B, 1.8%) and FIS ($2.2B, 1.9%): Payments infrastructure plays that straddle fintech and traditional finance.

Healthcare: The Second Pillar

Healthcare at ~15% of the portfolio reflects a contrarian bet on a sector that's been out of favor since 2021. The holdings span the entire value chain:

• CVS Health ($3.3B, 2.8%): The Aetna integration is maturing, and CVS's vertically integrated model (pharmacy + insurance + clinics) is finally beginning to show margin improvement.
• Regeneron ($2.3B, 1.9%) and Gilead ($2.4B, 2.0%): Both biotech leaders generate massive free cash flow and trade at meaningful discounts to the broader biotech sector.
• UnitedHealth ($2.1B, 1.7%) and Cigna ($2.1B, 1.7%): Managed care organizations that benefit from aging demographics and Medicare Advantage enrollment growth.
• GSK ($2.5B, 2.1%) and Sanofi ($2.1B, 1.7%): European pharma trading at steep discounts to US peers, offering pipeline optionality at bargain valuations.

The Brookfield Bet: Q4's Biggest Move

The most notable Q4 activity was a brand-new $1.9B position in Brookfield Corp (BN) — representing 0.8% of the portfolio from a standing start. This is significant for a firm that typically builds positions gradually over quarters.

Brookfield is the publicly traded parent of one of the world's largest alternative asset managers, with over $1 trillion in assets under management across real estate, infrastructure, renewable energy, and private equity. For Dodge & Cox, the appeal likely lies in Brookfield's asset-heavy model trading at a substantial discount to its sum-of-parts value — exactly the kind of opportunity their value framework is designed to capture.

AUM Growth: Slow and Steady

Dodge & Cox's AUM trajectory tells a story of disciplined growth. From $146.8B in Q1 2023 to $185.3B in Q4 2025, the firm has grown 26% over roughly three years — driven primarily by market appreciation rather than aggressive asset gathering. The portfolio expanded from 203 holdings to 222 over the same period, suggesting selective additions rather than style drift.

Q4 2025's +1.98% return was modest but characteristic. Value investing doesn't produce headline-grabbing quarters — it compounds. Over longer periods, the math of buying at lower multiples and capturing mean reversion has historically rewarded patient capital.

The Value vs. Growth Thesis

CIO David Hoeft has been clear: "Value investing has stood the test of time." The current market environment may prove him right. The Russell 1000 Growth Index trades at 28.8x forward earnings versus 16.1x for the Value Index — a spread that has historically preceded periods of value outperformance.

Dodge & Cox's philosophy goes beyond just buying cheap stocks. Their research team looks for what they call "intangible value" — competitive advantages, management quality, and business model durability that the market is temporarily mispricing. This explains positions in companies like RTX (defense spending tailwinds), Johnson Controls (smart building retrofit cycle), and FedEx (logistics network effects) — each with moats that aren't captured in simple valuation screens.

For investors used to the high-octane returns of tech-heavy portfolios, Dodge & Cox's approach can seem anachronistic. But with tech valuations stretched and interest rates creating real competition for growth stocks, a $185 billion fund that deliberately avoids Silicon Valley's gravity may be better positioned than the market gives it credit for.

Frequently Asked Questions

Does Dodge & Cox own any tech stocks?

Yes, but they're significantly underweight. Tech represents roughly 12% of the portfolio versus 32% for the S&P 500. Their tech holdings include Alphabet (combined ~4.0%), Microsoft (1.9%), Amazon (1.9%), and Meta (1.9%) — all held at modest weights. No pure-tech company appears in the top 5.

What is Dodge & Cox's investment strategy?

Dodge & Cox follows a deep value, research-driven approach. Founded in 1930, the firm buys out-of-favor stocks where they believe the market is underestimating long-term fundamentals. They hold positions for years and build them gradually, favoring cash-flow-generating businesses over high-growth narratives.

Why are financials the largest sector in the portfolio?

Financials (~20% of AUM) benefit from higher interest rates boosting net interest margins, post-crisis balance sheet strength, and historically low valuations. Dodge & Cox sees banks and insurers as classic value plays where sentiment lags improving fundamentals.

What was the biggest new position in Q4 2025?

Brookfield Corp (BN) was added as a brand-new $1.9B position (0.8% weight). Brookfield manages over $1 trillion in alternative assets and trades at a significant discount to its sum-of-parts valuation — fitting Dodge & Cox's contrarian value framework.

How has Dodge & Cox's AUM changed over time?

AUM grew from $146.8B (Q1 2023) to $185.3B (Q4 2025), a 26% increase over roughly three years. Growth has been driven by market appreciation and steady inflows rather than aggressive marketing or style drift. The number of holdings increased modestly from 203 to 222.

How does the portfolio compare to index funds?

Unlike the S&P 500, which has ~32% in technology, Dodge & Cox allocates just ~12% to tech while overweighting financials (20%), healthcare (15%), and industrials (14%). This creates genuine diversification for investors whose other holdings may be tech-heavy.