Large-Cap Core Fund Managers Aggressively Buying Sector Leaders

To say that hedge fund and mutual fund managers tend to follow the herd is an incredible understatement and always has been. While publicly they sometimes seem reluctant to discuss their holdings, especially stocks they short, the reality is managers tend to talk among themselves as they run in the same circles. Often those discussions are centered around their portfolios and what is in them.

In a recent Jefferies report, superb equity strategist Steven DeSanctis breaks down the top holdings in not only all three market capitalization groups — large cap, mid-cap and small cap — but also into core, growth and value categories.

Large-cap core managers like dividends and names with significant overseas exposure. The category is bigger than the index on a weighted basis, but the median is half the size of the benchmark. Here are the top five holdings of these fund managers.


This technology giant has been hit recently on concerns that the iPhone X is not the huge home run that was expected. Apple Inc. (NASDAQ: AAPL) designs, manufactures and markets consumer electronics and computers, and it has developed its own proprietary iOS and Mac OS X operating systems and related software platform/ecosystem.

Revenues are principally derived from the iPhone line of smartphones, hardware sales of the Macintosh family of notebook and desktop computers, iPad tablets and iPod portable digital music players. The company also realizes revenue from software, peripherals, digital media and services.

It’s no surprise that this technology giant is in the top slot, as 81.5% of these managers own the stock. One of those managers is the legendary Warren Buffett, who owns a reported, and stunning, 165 million shares.

Apple shareholders are paid a 1.53% dividend. The consensus price target across Wall Street is $193.02. The stock traded early Thursday at $164.05. The 52-week trading range is $141.16 to $183.50.


This top old-school technology stock has posted all-time highs this year and has a massive $138.6 billion sitting on the balance sheet. Microsoft Inc. (NASDAQ: MSFT) continues to find an increasing amount of support from portfolio managers, who have added the software giant to their holdings at an increasingly faster pace all of this year and last.

Numerous Wall Street analysts feel that Microsoft has become a clear number two in the public or hyper-scale cloud infrastructure market with Azure, which is the company’s cloud computing platform offering. Some have flagged Azure as a solid rival to Amazon’s AWS service. Analysts also maintain that Microsoft is discounting Azure for large enterprises, such that Azure may be cheaper than AWS for larger users. The cloud was big in the recent earnings report, which was outstanding.

And 75.8% of the managers own the software giant, which is quickly gaining traction in the cloud and may be one of the safest bets when it comes to owning technology.

Microsoft shareholders currently receive a 1.82% dividend. The posted consensus price objective for the stock is $105.21. The shares traded at $93.55 Thursday morning, in a 52-week trading range is $65.14 to $97.24.

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