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Are You a Secret Apple Stockholder?

Date: Thursday, January 20, 2011
Author: Brett Arends, The Wall Street Journal

If you're like most Americans, you probably figure the news about Steve Jobs and Apple doesn't affect you directly.

You may not know it, but you are probably a secret Apple stockholder. And maybe a big one. Brett Arends explains why.

Sure, you're probably concerned for Mr. Jobs's well-being. (The Apple CEO, who has a history of medical problems, is taking an indefinite leave for unspecified health reasons.) And you may take a general interest in news about the leadership of one of America's most prominent and successful companies.

But you may nonetheless think, "This doesn't have anything to do with me. I don't work for Apple. It's not going to affect my iPhone, iPad or MacBook. I don't hold any Apple stock in my portfolio."


Think again.

[roi_0118] Bloomberg News

Apple CEO Steve Jobs unveils the iPhone 4 last June.

You may not know it, but you are probably a secret Apple stockholder. And maybe a big one.

Apple is everywhere on Wall Street. Few stocks are as widely held in regular mutual funds as well as in hedge funds. Few affect the performance of so many retirement portfolios. This is especially unusual because Apple is such a volatile growth stock. In recent years it's fallen by two-thirds and it's quadrupled. Most of the other shares that crop up in every portfolio are dull ones like Exxon Mobil or Procter & Gamble or Johnson & Johnson.

According to a review of company filings that I conducted using FactSet, a market data provider, an astonishing 4,100 mutual funds hold stock in Apple. (That compares to just 3,630 for Exxon and J&J and 3,200 for P&G, although the figure for Microsoft is even higher at almost 4,800.)

And many of the funds holding Apple are making very big bets on the stock on your behalf: More than 750 of them have invested at least 5% of their entire portfolio in this one stock. Seven hundred and fifty. (The figure for Exxon: just 188.)

They include some very well-known and widely held funds. The giant Fidelity Contrafund, managed by Will Danoff, held more than $5.7 billion in Apple stock at the last count. That's 7.5% of the entire portfolio. Fidelity Growth Company held another $2.2 billion, or 5.7% of assets.

T. Rowe Price Blue Chip Growth has 8% of its investors' money in Apple. Janus Fund: 5.6%. Other funds with more than 5% in Apple include Harbor Capital Appreciation, Oppenheimer Capital Appreciation and Oppenheimer Main Street, Franklin Growth, Vanguard Growth Equity, BlackRock Capital Appreciation, Putnam Voyager, Columbia Marsico Growth, John Hancock II Blue Chip Growth and Morgan Stanley Focus Growth.

In fact, more than 100 mutual funds have invested more than 10% of their assets in Apple. It makes up 10% of the iShares Morningstar Large Growth Index exchange-traded fund, 14% of the iShares Dow Jones US Technology Sector Index ETF. The Janus Twenty fund had nearly 11% of its money in Apple at the end of last year.

And Apple alone accounts for more than a fifth of the widely followed Nasdaq 100 Index. Anyone investing in that index—such as through the widely-held PowerShares QQQ Trust—may think they are spreading their money broadly across all of America's top technology stocks. But, in truth, you are investing more of your money in Apple than you are in Qualcomm, Google, Microsoft, Oracle, Amazon.com and Cisco Systems—put together!

If your U.S. stock portfolio is up over the past few years, and especially last year, Apple's remarkable performance probably has something to do with it.

So you might want to pay attention to events at One Infinite Loop in Cupertino, Calif., after all. It's not just about the next iPad. We are all Apple stockholders now.

Write to Brett Arends at brett.arends@wsj.com