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Is Apple Hurting Your Mutual Fund?

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  • Description

    Barrack Yard Advisors CIO Martin LeClerc on the impact on mutual funds of Apple shares’ decline.

  • Duration 3:54
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Have you checked your portfolio lately chances are Apple Stock is dragging yours down.

Apple lending in the red again today down nearly 1% and even if you don't own the stock -- could be losing money with it.

-- -- portfolio manager -- Iraqi art advisors joins me now Martin welcome to the show so let's look look at a couple of numbers here so.

All time high for Apple Stock 707.

-- dollars it's down 28%.

It comprises 18% of the NASDAQ ridiculous.

So it seems to me probably every mutual bond holder in the world is probably suffering right now.

Well a lot of -- Jerry I think something like 78%.

Of growth funds own apple.

And something like 40% of a value funds own own apple so what certainly there's say wow that's why -- you know what proportion of value funds.

About 40% and that's OK well that's up over -- a year of from 29.

Our morning show folks top mutual fund holders an apple a long list here in -- what's interesting about this.

A lot of -- tech funds Fidelity select computers portfolio -- center -- But they own nearly 20%.

Nearly 20% of the investments in their -- are in Apple Stock do you think that's a good idea.

Well it depends what happens -- -- thought going forward but it certainly on whatever -- -- like putting everything in different pots that's ridiculous.

Seattle they used to be a -- that mutual funds I think it's still might be there that you're supposed to not have more than 10% and any positions so yeah it is it is a bit extreme and.

Into your earlier point how can you have so many funds that are growth funds and tell -- -- their value funds invested in the same stock that makes no sense.

I think in you tell me what you think I think portfolio managers out there they saw other run up an Apple Stock biggest -- -- to get on board.

And whether or not in matched bear.

Portfolio.

Ramifications are plants they just went ahead -- a bunch of money into it.

Well there was a lot about momentum chasing that's for -- and but what's interesting is that.

Apple's going through a major trans transition right now it's going through a major transition in terms of it's growth profile.

It was growing like a weed you know hyper growth period to probably going -- just a normal good growth period.

And what that has resulted in is a change in ownership so a year ago.

Fewer you had more growth funds own the stock.

And they had a larger percentage of their assets and apple the need -- now -- and and so.

-- sell or hold Martin what do you say.

Well if you have it I would hold it for sure.

Because the exciting thing about apple going forward is that historically we have.

And patterns of of companies they go through these hyper growth periods and then -- slowdown.

And then and -- music from the peak you do see a 25 to 30% correction.

It's hard is no way you can predict when -- when when things will sort out but eventually the value walk out and they're changing their business model -- going from.

They will become a more like a branded consumer company sort of like -- ninety or -- from -- So I -- long term I I think it's worth holding -- very active.

Did financially strong they don't.

And they had a 125 billion dollars in net cash from the projections I've seen within 34 years that that should double.

So there is that it's as -- aren't there companies of the world I'm -- -- -- evaluation either in fact.

That is higher than for example IBM's and is trading at a lower multiple towards our cash flow.

Thanks for coming on the show tonight I appreciate it great analysis like an apple well done we appreciate your time you must come back thank you.

Thanks --

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