Some Mutual Funds are Riskier Invested In Apple Stock

Due to phenomenal rise of Apple stock price (AAPL), some mutual funds have become riskier. Apple stock price has increased by about 50% this year. It has become a dilemma for mutual fund managers. It is feared that investors might become victims of their own achievement.

In the mutual fund industry, it is generally considered that any stake more than 5% of assets is regarded as a big stake. However some mutual funds have got much more than that limit of 5%. As many as 46 funds analyzed by Morningstar have got more than 9% of their assets invested in Apple. For example roughly 9% of Fidelity’s $80.8 billion Contrafund has been invested in Apple. Blue Chip Growth of Fidelity’s $14.7 billion and Price Growth fund of T. Rowe’s $28.7 billion have high stakes in Apple stock.

Shares of Apple, the world’s most valuable company by market capitalization have increased from $310 in June 2011 to more than $600.

At the moment, however a sharp fall in Apple’s shares may appear unlikely. But if it happens, it would generate ripple effect rapidly for the retirement accounts of millions of shareholders who preferred to invest in funds instead of individual shares.

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Leo Pierson

About Leo Pierson

Former partner in a real estate management firm, Leo, has been active in the market for the last 8 years. Ex-blogger on penny stocks, now focused on long term growth stocks, Leo provides valuable market snapshots each day as part of our editorial team.

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