Apple’s drastic loss in value to hurt tech funds
Tech funds have taken a hit as the largest listed company in the world, Apple, saw its shares plummet yesterday in spite of surging profits.
Apple shares opening trading down 6.7 per cent today in New York after its sales failed to match expectations last quarter.
Revenue for the company was up 33 per cent to $49.6bn, while profits were up 38 per cent.
However, sales of the iPhone were at 47.5m units, about 1.5m below Wall Street’s expectations.
Apple has also failed to quell concerns about its ability to weather the volatility in China. Chief executive Tim Cook said the recent fluctuations in Chinese stock markets were a mere “speed bump”.
China has increasingly become an import part of Apple’s income. Revenues from Greater China more than doubled to $13.2bn in the past quarter.
Investors were also concerned as the company failed to reveal the sales figures of its new product, the Apple Watch.
Technology funds are likely to feel the hit as several hold almost 10 per cent of their fund in the company.
Henderson Global Technology, Invesco Global Technology, Cavendish Technology and AXA Farmlington Global Technology all hold more than 9 per cent of their portfolio in Apple, according to data from FE Analytics.
However, these funds still hold an underweight position in the stock compared to their benchmark, for which Apple makes up more than 16 per cent.
Technology funds and trackers will also have to contend with a drop in Yahoo’s and Microsoft’s share prices. Yahoo fell 70 cents on Tuesday after the company predicted sales for the current quarter lower than analysts expectations.
Meanwhile, Microsoft fell by $1.6 in trading on Tuesday after the company announced its largest ever quarterly net loss as it had a $7.5bn writedown after the purchase of Nokia’s handset unit failed to rescue the company’s mobile business.
