| NEW YORK
NEW YORK May 2 Active stock fund managers
around the world are holding the lowest percentage of Apple Inc
shares in their portfolios when compared to the iPhone
maker's overall weighting in indexes, even as the shares hit
record highs, according to a research note by investment bank
UBS late Monday.
The current positioning by investors suggests Apple stock
has room to run as portfolio managers chase performance. This
should give Apple more fuel even after it rallied 56.4 percent
in the 12 months leading up to Monday's close.
"Active fund managers as a whole continue to underperform
their benchmarks and are not going to want to leave a lot of
performance on the table if they continue to see this company
rally," said Todd Rosenbluth, director of ETF and mutual fund
research at CFRA, an independent research firm in New York.
Only about a third of large-cap core mutual funds are ahead
of the 6.7 percent gain in the benchmark S&P 500 index for the
year to date, leaving portfolio managers struggling to prove
their worth at a time when low-priced index funds and exchange
traded funds that mimic benchmarks continue to take market
share, Rosenbluth said.
The UBS ranking was based on institutional investment in
individual stocks. The total dollar holdings in a stock were
compared to the size of the overall fund portfolio to calculate
the stock's "investor weight." This was later compared with "the
relevant equity index benchmark to form the active weight."
For its part, global fund managers' "investor weight" of
Apple stood at 1.3 percent while their "active weight"
positioning was negative 0.6 percent, UBS data showed. In a
regulatory filing, Warren Buffett's Berkshire Hathaway reported
owning 57.4 million shares of Apple as of Dec. 31, up from just
from 15.2 million shares three months earlier.
Shares of Apple are up about 26.8 percent for the year to
date in anticipation of a new iPhone model expected to be
released in September marking the 10th anniversary of its
Sales of the iPhone, which account for 69.4 percent of
Apple's total revenue, were larger than expected in the quarter
that ended Dec. 31, helping mitigate concerns about consumers
switching to cheaper alternatives or holding on to their current
"You're not seeing a slowdown in demand ahead of a major
upgrade year, and there's a potential for higher costs and
margins with the new model," said Steve Chiavarone, a portfolio
manager at Federated Investors.
Apple reports second-quarter results after the closing bell.
(Reporting by David Randall; Editing by Jennifer Ablan and