Are You a Secret Apple Stockholder?

Wall Street Journal - 20 January 2011

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

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."

Right?

Think again.

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.)