Carl Icahn says underweight Apple bets will hurt mutual funds’ performance

“Billionaire activist investor Carl Icahn said Thursday that mutual funds will increasingly realize that being underweight shares of Apple will hurt their performance as the technology giant continues to innovate,” Sam Forgione reports for Reuters.

“‘They are underweight Apple in relation to the index funds, and I think more and more of these funds will realize that’s going to hurt their performance in the future as Apple continues to launch new products in new categories and continues to grow earnings,'” Icahn told Reuters,” Forgione reports. “In 2014, funds that underweighted Apple compared with broad market indexes were the most likely to underperform their peers, according to Morningstar.”

“Icahn owned about 53 million Apple shares at the end of the first quarter, according to a Securities and Exchange Commission filing,” Forgione reports. “Icahn reiterated on Thursday that Apple should increase its share buybacks. Icahn has pushed Apple to boost buybacks since announcing his stake in the company in August 2013. His latest push came after Apple boosted its repurchase program in April to $140 billion from $90 billion announced last year.”

Read more in the full article here.

MacDailyNews Take: With 53 million shares, unsurprisingly, Icahn is Apple’s head cheerleader.


  1. That’s why I allocate a good percentage toward directly owning Apple shares, and the rest toward other investments. Basically ends up being the same as having apple shares aggressively included in them anyway. A portfolio as a whole is based on the total allocation. It doesn’t matter if your mutual funds include Apple stock or not as long as you’re buying your own.

  2. An old adage: “Put all your eggs in one basket—and then WATCH THAT BASKET!” No broker subscribes to such advice, of course, and very few here would, I’d wager; but it has served us spectacularly well since 1988. 75% of our portfolio is AAPL (40K shares), and there have been some very bad days with that ratio, of course. However, over the years . . . WOW. We’re “gods” with our advisers now, even though they would NEVER have put us in this position. Go, AAPL!

  3. Apple shares took that big tumble back at the end of 2012 and i doubt the funds will be in any hurry to get burned again. Just saying. I’m certain they feel much more comfortable holding onto Microsoft, Google, Netflix and Amazon. Those stocks don’t come with the volatility Apple has. They seem a lot safer stocks for conservative investors. I’m not sure what makes Apple so damn volatile but it is. It also doesn’t perform like a typical stock. I’ve been in Apple since 2004 so I’ve already got plenty of gains but for new investors, I think they could make quicker gains with many other stocks.

    Apple is making all the big money but YTD, both Netflix and Amazon are seriously kicking Apple’s ass in share gains so what’s the point. Their P/E’s are growing like crazy and Apple’s P/E keeps shrinking. Why would a fund want Apple when there’s plenty of free money to be made elsewhere. If you want long-term gains go Apple, but if you can’t wait, any number of momentum stocks would be a better choice.

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