24 August 2020 - Having been launched from founder Steve Job’s garage in 1976, it took four decades for Apple to become the world’s first $1 trillion company.
Last week – just two years further on - it became the first US company to be valued at $2 trillion (and the second company ever) – its stock price having more than doubled in just five months since the market lows in March*.
Apple now accounts for 7% of the S&P 500’s total market value – equal to the combined value of the S&P 500’s smallest 200 firms**. And all this despite having had to close its stores due to the global pandemic and having come under political pressure about both its reliance on China and allegations of anti-competitive behaviour.
We take a look at the Chelsea Selection fund managers who have Apple in their top ten holdings and have enjoyed some of these epic gains:
The Chelsea Selection fund with the largest holding in Apple (8.2%^) is AXA Framlington Global Technology fund. Managed by Jeremy Gleeson since 2007, its lack of benchmark constraints means it is free to invest in 'new technology' rather than 'old commodity' companies.
Next up is Artemis US Extended Alpha with a 6.7%^^ weighting. Manager William Warren looks to understand the long-term trends and economic conditions that are shaping the US economy, and will then use a flexible, pragmatic approach to pick suitable stocks. He can also short stocks whose share prices he thinks will fall.
Innovation, unique brands and intellectual property are the sort of features that can give companies a competitive advantage, helping them grow into market leaders. These kinds of stories are what manager Steve Kelly hopes to uncover for the AXA Framlington American Growth fund. It has 6.5%^^ weighting to Apple.
Managed by Geode Capital Management LLC, a leading specialist in the management of index-based strategies in Boston, Fidelity Index US fund was designed to replicate the characteristics of the S&P500 index although it may not necessarily hold all the company shares that make up the index, or hold shares in exactly the same weightings. Its allocation to Apple is currently 6.4%^.
Brown Advisory US Flexible Equity invests in US companies at bargain prices. It has a bias towards medium and large-sized businesses and those with management change offer particular appeal. Manager Maneesh Bajaj currently has a 4.3%^ weighting to Apple in the portfolio.
Investing predominantly in larger companies, Fidelity Global Special Situations manager Jeremy Podger uses the breadth of Fidelity's global research team to highlight what he sees as being the best ideas from around the world and form a blended portfolio that can deliver consistently through all market conditions. He has 3.4%^ of the portfolio invested in Apple.
T. Rowe Price Global Focused Growth Equity fund invests in a diversified selection of global companies, which manager David Eiswert believes have the potential for above-average and sustainable rates of earnings growth. The companies may be based anywhere in the world, including emerging markets. Apple is a 3.0%^ weighting in the fund.
*Source: Yahoo finance, 19 August 2020
^Source: Fund factsheet, 31 July 2020
^^Source: Fund factsheet, 30 June 2020
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The views expressed are those of the companies and managers and do not constitute financial advice.