Microsoft has seen lots of activity among mutual funds through the end of April, as it was the biggest increase in position for one type of portfolio managers and the biggest decrease for another. Apple is still hugely unpopular among some types of funds as large-cap core funds bucked the secular concerns by increasing their exposure to Media stocks, reports Goldman Sachs.
Mutual funds raise on Information Tech
Analysts Peter Callahan and Lalima Bassi said in their June 9 “Snapshot of TMT Positioning” report that as of the end of April, large-cap core mutual funds were overweight on Information Technology stocks and had increased their exposure to the sector by 7 basis points. However, they added that Growth and Value funds cut their exposure to the sector. On average, positioning in the sector climbed 31 basis points quarter over quarter, although they said the average position is equal weight against the S&P 500.
In Telecom Services, they noted an increase of 2 basis points in aggregate positioning among large-cap core mutual funds quarter over quarter. However, they are still underweight on the sector against the S&P 500, on both an aggregate and average basis, the Goldman team said.
Large-cap core mutual funds move to overweight on Semis
They added that on an average basis, large-cap core funds upped their exposures to Semis and Semicap, which made the average fund overweight on the sector against the S&P. The biggest increases at the average fund were in Broadcom and Intel.
The Goldman team noted an interesting shift among large-cap core funds as they increased their long positioning in Media stocks, which they found to be interesting in light of the ongoing secular issues. Twenty-First Century Fox enjoyed the biggest increase in long positioning. Further, they found that two semiconductor companies and two media companies were four of the biggest five overweight positions among large-cap core mutual funds.
Shifts in Microsoft, Apple
Callahan and Bassi reported some interesting shifts in positioning for Microsoft as well, which they said saw the greatest increase in positioning among large-cap growth funds on an aggregate basis. However, Microsoft was also the biggest decrease among value funds, which on an aggregate basis cut their exposure by 19 basis points. Core managers also trimmed their exposure to Microsoft by a significant 13 basis points. The analysts believe these shifts indicates Microsoft’s transition toward being a cloud company.
They add that core and growth funds are still hugely underweight Apple, with the former being underweight by 155 basis points and the latter being underweight by 293 basis points. Interestingly, value funds upped their exposure to Intel, Hewlett-Packard Enterprise, Western Digital, Oracle and HP, while they cut their exposure to Microsoft, Symantec, Verizon, Micron Technology, and Corning.
Core, growth and value mutual funds were all very underweight IBM and AT&T.
