Were These Investors Apple’s Weak Link?

The mutual fund industry may have contributed in large part to the recent sell-off in Apple (NASDAQ:AAPL), according to a report by Barron’s. Led by the $113 billion Growth Fund of America, several funds drastically cut down their stake in the iPhone maker between August and December last year. Apple touched a record closing high of $702.10 in mid-September, but has fallen more than 35 percent since.

The Growth Fund of America, the third-largest fund in the country, got rid of almost $3 billion worth of Apple stock during the fourth quarter. While Apple had been its top-weighted stock at 4.2 percent from seven million shares worth $4.8 billion on August 31, the company fell to under 1 percent at the end of the year. At the time, the 1.9 million Apple shares were worth just over a billion dollars.

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The fund’s biggest stake is now in Amazon (NASDAQ:AMZN). According to Growth’s annual report from October 8, Apple’s had brought it “very satisfying results” with a 72.9 percent total return, Barron’s said.

Similarly, the Fundamental Investors fund’s stake of about 1.9 million Apple shares worth $1.1 billion dollars used to make up 2.3 percent of its portfolio. At the end of the year, that was down to 1 percent, made of 934,000 Apple shares worth half a billion dollars. Amcap Fund more than halved its stake to 360,000 shares, or 0.75 percent, from August to December, while the New Economy Fund cut Apple short to 0.26 percent as of December 31 from 4 percent on May 31. New Economy Fund instead invested big in Facebook (NASDAQ:FB).

According to Morningstar dataApple was among the top 10 holdings in more than 1,000 mutual funds last year, up from just 11 in 2002. “We’ve never seen another company have as big an impact” on overall market returns, S&P Dow Jones Indices analyst Howard Silverblatt told MarketWatch.

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