Apple is losing the interest of some big-money investors, RBC says

Michael Nagle/Getty ImagesPeople line up to be the first to buy an iPhone at Apple’s flagship store on Fifth Avenue on June 29, 2007 in New York City. Hype for the iPhone, which costs $US499 or $US599, has driven demand into overdrive as it was released at 6:00 p.m. today nationwide.
  • Big-money investors are paring their holdings in Apple shares, according to a new report from RBC Capital Markets.
  • The stock is no longer one of the top overweight holdings in Russell 1000 value benchmark funds.
  • This may signal a shift in long-only investors’ interests, the report says.
  • Watch Apple trade live here.

Big funds that once bet heavily on Apple are taking a step back.

Apple is no longer a top overweight holding in Russell 1000 value benchmark funds as of this year’s third quarter, according to a new report from RBC Capital Markets.

The firm’s equity strategists looked at a broad swath of data, examining funds’ third-quarter stock holdings – 751 actively managed, diversified US equity funds tracked by investment management and research firm Morningstar focused specifically on large-cap names.

More granularly, the strategists, led by Lori Calvasina, pulled data from 158 funds that benchmark to the Russell 1000 value index and found that Apple was the only name to have fallen off those funds’ list of common overweight positions in the third quarter. The strategists found 35% of Russell 1000 large cap value funds own apple – and all of those positions are overweight.

Overweight positions in a portfolio are those which managers hold in excess relative to the security’s weight in the underlying investment portfolio. In other words, a manager might beef up a position in a particular stock to “overweight” if they thought it would outperform over time and raise that manager’s returns.

Speaking broadly about the trends in large-cap funds during the third quarter, the RBC equity strategists said the “few changes that we did see may reflect shifting interests among long-only investors.”

The funds’ reductions come as Apple is having a dismal fourth quarter. Shares have plunged 24% in three months as headwinds arise from the US-China trade war and concerns around the iPhone cycle pile on.

To be sure, Apple remains a top holding among large-cap funds, according to the report, as 67% of S&P 500 funds own the stock. However, just 27% of those funds are overweight the name, compared with their 46% overweight positioning in Alphabet and 42% in Microsoft.

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