InfoAnda - Apple's gains make some mutual funds riskier |

Pakistanis angry over detentions in Times Sq. case
Monday, May 24, 2010
ISLAMABAD – Relatives of three men detained by Pakistan for alleged links to the suspect in the attempted Times Square bombing say the men are innocent.
They

Taiwan denies boycotting Australian film festival
Thursday, August 6, 2009

AFP - Thursday, August 6TAIPEI (AFP) - - Taiwan's Beijing-friendly government on Wednesday denied boycotting an Australian film festival amid a row over the e

Merkel's support dips, regional ally resigns International
Thursday, September 3, 2009

By Sarah Marsh and Noah Barkin

BERLIN (Reuters) - Chancellor Angela Merkel suffered a double blow on Thursday as a senior party ally in east German

Minister seeks closure of anti-Berlusconi websites
Wednesday, December 16, 2009
ROME (AFP) - – The Italian government moved Tuesday to close down Internet sites encouraging further violence against Prime Minister Silvio Berlusconi, who

Asian markets mixed after Wall Street rally
Wednesday, March 18, 2009

By ELAINE KURTENBACH,AP Business Writer AP - Wednesday, March 18SHANGHAI - Asia's stock market rally seemed to be running out of steam Wednesday, despite an

Israel and Hamas vow to fight on in Gaza | 11 January 2009
Netanyahu to lobby in Russia for Iran sanctions | 14 February 2010
"Avatar" leads box office for second weekend | 28 December 2009

India grapples with high maternal death rate | International | | 26 January 2009

Forum Views () Forum Replies ()

Read more with google mobile : Apple's gains make some mutual funds riskier |

Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Home Business Business Home Economy Technology Media Small Business Legal Deals Earnings Social Pulse Business Video The Freeland File Markets Markets Home U.S. Markets European Markets Asian Markets Global Market Data Indices M&A Stocks Bonds Currencies Commodities Futures Funds peHUB World World Home U.S. Brazil China Euro Zone Japan Mexico Russia India Insight World Video Reuters Investigates Decoder Politics Politics Home Election 2012 Issues 2012 Candidates 2012 Tales from the Trail Political Punchlines Supreme Court Politics Video Tech Technology Home MediaFile Science Tech Video Tech Tonic Social Pulse Opinion Opinion Home Chrystia Freeland John Lloyd Felix Salmon Jack Shafer David Rohde Bernd Debusmann Nader Mousavizadeh Lucy P. Marcus David Cay Johnston Bethany McLean Edward Hadas Hugo Dixon Ian Bremmer Lawrence Summers Susan Glasser The Great Debate Steven Brill Jack & Suzy Welch Breakingviews Equities Credit Private Equity M&A Macro & Markets Politics Breakingviews Video Money Money Home Tax Break Lipper Awards 2012 Global Investing MuniLand Unstructured Finance Linda Stern Mark Miller John Wasik James Saft Analyst Research Alerts Watchlist Portfolio Stock Screener Fund Screener Personal Finance Video Money Clip Investing 201 Life Health Sports Arts Faithworld Business Traveler Entertainment Oddly Enough Lifestyle Video Pictures Pictures Home Reuters Photographers Full Focus Video Reuters TV Reuters News Article Comments (0) Counterparties: Today's Best Links America's never-ending bank bailout Big banks may have repaid U.S. bailout funds, but that doesn't mean the government's subsidies have stopped, writes finical strategist Barry Ritholtz. Read more at Counterparties CEO pay is no longer skyrocketing Bernanke: The recovery isn't here just yet Follow Reuters Facebook Twitter RSS YouTube Read 'Hunger Games' gorges on $214 million global debut 10:37am EDT Supreme court unlikely to delay Obama healthcare ruling | 3:04pm EDT Black friend defends shooter of Florida teen 25 Mar 2012 Bernanke's words drive Wall Street up 1 percent 4:36pm EDT Facebook: Evidence shows NY man's lawsuit is fraud 1:33pm EDT Discussed 215 Cheney recovering after heart transplant: spokeswoman 195 Obama makes killing of black Florida teen personal 174 Black friend defends shooter of Florida teen Watched Japanese tsunami boat appears near Canada Sat, Mar 24 2012 James Cameron back from the abyss Sun, Mar 25 2012 Obama tells Iran time running out to end nuclear standoff 11:53am EDT Wealth and Investing Center Apple's gains make some mutual funds riskier Tweet Share this Email Print Related News Apple's devoted shareholders get rich, and hang on Fri, Mar 23 2012 Market bounces back from 3-day losing streak Fri, Mar 23 2012 Analysis: Do not panic: The rally in risk assets is for real Fri, Mar 23 2012 How to Play It: A dividend strategy with Apple in mind Tue, Mar 20 2012 Apple's iPad throws off much more heat: tests Tue, Mar 20 2012 Analysis & Opinion Chart of the day, flash-crash edition Corporate governance: succession planning through crises and emergency transitions Related Topics Tech » Money » Media » An employee presents purchased new iPads to a customer at the Apple flagship retail store in San Francisco, California in this March 16, 2012, file photo. Credit: Reuters/Robert Galbraith/Files By David K. Randall NEW YORK | Mon Mar 26, 2012 5:13pm EDT NEW YORK (Reuters) - When it comes to Apple, investors could become victims of their own success. It is a dilemma more mutual fund managers are wrestling with due to the company's nearly 48 percent gain this year. Those who bought Apple well below its current price have seen the value of their investment balloon, sometimes to more than 10 percent of their fund's assets. That effectively turns a brilliant decision into a concentrated stake, undercutting the benefits of diversification and making some mutual funds riskier. As Apple stock has marched higher, well-timed bets on the company have helped some growth-oriented and blended mutual funds outperform the broad market. But in doing so, many of those funds have now tied investor dollars closer to the performance of a single company. This isn't much of an issue when it comes to funds that market themselves as narrow bets on technology. But many funds whose broad holdings could be the core of a (401)k or similar retirement plan - Fidelity's $14.7 billion Blue Chip Growth and the $28.7 billion T. Rowe Price Growth fund among them - are stocking up on Apple. Apple makes up nearly 9 percent of Fidelity's $80.8 billion Contrafund, for instance. The fund is the sixth-most popular holding in 401(k) plans nationwide, according to BrightScope, a firm that ranks company (401)k plans. A dramatic fall in Apple's shares, however unlikely that may seem at the moment, would quickly ripple across the retirement accounts of millions of investors who thought they were safer investing in funds than individual shares. "It adds to the risk profile of a fund to have a significant stake in one stock because it makes them more susceptible to bad news on one or two stocks and they won't be able to cushion the blow with diversification," said Todd Rosenbluth, a senior fund analyst at Standard & Poor's Capital IQ. Generally in the mutual fund industry, any position over 5 percent of assets is considered a large bet that may influence a fund, said Dan Culloton, a fund analyst at Morningstar. CONCENTRATED BETS Shares of Apple have nearly doubled from the $310 they hit in June 2011, and at about $600 a share are up nearly 48 percent in 2012 alone. Apple, currently the world's most valuable company by market capitalization, now has a weighting of 4.2 percent in the broad S&P 500 portfolio, the benchmark against which the performance of most U.S. mutual funds are judged. That means 4.2 cents of every $1 invested in a S&P 500 index fund will be allocated to Apple shares, before fees. By definition, actively managed mutual funds have overweight positions in companies they think will outperform the broad market, but usually not more than 5 or 6 percent. But 46 funds tracked by Morningstar have stakes in Apple that exceed 9 percent of assets, or roughly double the company's weighting in the S&P 500 index. This does not include sector funds that focus on technology or other specialized investment. The $1.5 billion Oppenheimer Main Street Select fund, for instance, blends value and growth stocks in its portfolio of 34 companies. It had 10.5 percent of its assets, or two and half times the benchmark weight, in Apple as of the end of January, according to Morningstar data. That concentrated bet is one reason that the fund is up 13.9 percent so far this year, or 2.6 percentage points above the broad S&P 500 index. A dip in Apple's share price and the fund could fall more than the broad market. The fund managers declined to comment. Fidelity's Contrafund, meanwhile, focuses on growth stocks. It holds 427 stocks, but 8.6 percent of its portfolio, or a total of $6.6 billion, was concentrated in Apple at the end of January. That stake is more than even Apple's weighting of 7.6 percent in the narrower Russell 1000 Growth index, which many growth fund managers use as an internal benchmark. The Contrafund is up 13.7 percent since the start of 2012. Fidelity declined to comment. Some reluctance on the part of portfolio managers to sell Apple shares is understandable. Trimming exposure could lead to underperformance for a fund. "We hear about this a lot from portfolio managers. I have no doubt that they'd like to sell it and take their profits, but you have to be in it to win it and right now Apple's momentum is going up," said Howard Silverblatt, senior index analyst at S&P. These fund managers usually realize that they are taking on additional risk, Silverblatt said. "What helped you on the way up kills you on the way down." CUTTING RISK Some fund managers are taking steps to lower the weighting of Apple in their portfolios. "We got to the point where it was an inordinate part of our portfolio, and in order to control risk it was only prudent to trim it back," said Robert S. Bacarella, a Wheaton, Illinois fund manager who runs the $49 million Monetta fund with his son. Bacarella first bought 10,000 shares of Apple in early 2005 when it traded at around $40 per share. In September 2005, those 10,000 shares were worth $536,100 and accounted for 0.9 percent of his portfolio, according to Morningstar data. Fast forward to December 2011, and Bacarella again had 10,000 shares of Apple. This time, however, their value was nearly $4.1 million, which accounted for 9.3 percent of his fund's weight. He trimmed his shares by 5,000 earlier this year. Apple now makes up 5 percent of his assets. "This is about risk control. You never know what is going to happen," he said. The sizeable positions built up by other funds would only exacerbate an Apple fall , he added. "If everyone sees deceleration of earnings growth, what will you do?" Bacarella asks. "I would think that you're going to bail and that will compound to the downside." (Reporting By David Randall; Editing by Walden Siew, Jennifer Merritt and Tim Dobbyn) Tech Money Media Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above. Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Advertise With Us Connect with Reuters Twitter Facebook LinkedIn RSS Podcast Newsletters Mobile About Privacy Policy Terms of Use AdChoices Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

Other News on Tuesday, 27 March 2012
Ex-IMF head Strauss-Kahn put under formal probe in France |
Pope receives warm welcome in communist Cuba |
Footage filmed by French gunman sent to Al Jazeera: police |
Japan Airlines takes delivery of two Boeing 787s |
Cameron discloses Downing Street dinners in access row |
The ordeal of defending Norway's mass killer |
Microsoft seizes servers in Zeus cyberfraud |
Apple's gains make some mutual funds riskier |
Big venture firm raises the networking stakes |
NFC phone sales to jump to 100 million in 2012: research |
Facebook: Evidence shows New York man's lawsuit is fraud |
Titanic director makes first solo dive to Earth's deepest point |
Madonna's 'MDNA' receives lukewarm welcome from critics |
Scarlett Johansson celebrity hacker pleads guilty |
Jack Osbourne recovering after appendix removal |
Early Les Paul guitars to be sold at auction |
Japan goes off script at nuclear summit to slam North Korea |
U.S. seeks missile-defense shields for Asia, Mideast |
Analysis: West waits on Myanmar vote to start sanctions scale-back |
Australian Senate no legal haven for Wikileaks boss |
North Korea gives details of weather satellite launch |
Turkey's ex-army chief refuses defense in terrorism trial |
Analysis: Greek nightmare makes poor ad for asset sales |
Syria replies to Annan; Homs shelled again |
Seeking Cuba freedoms, pope to honor patron saint |
Apple CEO in China mission to clear up problems |
Microsoft seizes servers in Zeus cyberfraud |
New Sony CEO to directly oversee troubled TV ops |
Madonna's MDNA receives lukewarm welcome from critics |
Director James Cameron awestruck at ocean's deepest spot |
NY studios expand in bid for more films, TV shows |
Scarlett Johansson celebrity hacker pleads guilty |
Bobby Brown arrested for driving under the influence |
Bully documentary to land in theaters unrated |
Greek parties say election likely to be on May 6: sources |
Russian cannibal serial killer confesses to police |
Chavez leads rival in latest poll |
Spain arrests Qaeda suspect for inciting attacks |
Treasury: Iran airline, officials help ship arms |
Bahrain rejects Shi'ite teenager's claim of police abuse |
Apple, Sony, 4 others sued by Graphics Properties |
Australia regulator says Apple misleading consumers on iPad |
Apple supplier Hon Hai to take 11 percent stake in Sharp |
Most of world interconnected through email, social media |
Fraud costs Asia $1 billion a year: Progress Software |
China's Huawei down but not out in Australia |
Angry Birds maker buys Finnish gaming studio |
OTI sues T-Mobile USA, alleges patent infringement |
Harry Potter novels available in ebook format |
Greece at new risk of being pushed off euro
Bodies of missing Tenn. mom, Jo Ann Bain, and daughter found
Female Breasts Are Bigger Than Ever
AMD Trinity Accelerated Processing Units Now in Volume Production
The Avengers (2012 film), made the second biggest opening- and single-day gross of all-time
AMD to Start Production of piledriver
Ivy Bridge Quad-Core, Four-Thread Desktop CPUs
Islamists Protest Lady Gaga's Concert in Indonesia
Japan Successfully Broadcasts an 8K Signal Over the Air
ECB boosts loans to 1 trillion Euro to stop credit crunch
Egypt : Mohammed Morsi won with 52 percent
What do you call 100,000 Frenchmen with their hands up
AMD Launches AMD Embedded R-Series APU Platform
Fed Should not Ignore Emerging Market Crisis
Fed casts shadow over India, emerging markets
Why are Chinese tourists so rude? A few insights

USD EUR - 1 year graph		BlogMeter 1.01