Apple's surging shares have prompted hundreds of mutual funds to buy the stock -- including many that are not expected to invest in a giant, US-based technology company that pays no dividends.
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At least 50 small-cap and midcap mutual funds -- which focus on small and midsize companies -- own Apple, the world's largest company by market value, according to analyses for The Wall Street Journal by market-data firms Morningstar and Ipreo Holdings.
Non-US-focused funds also own it. Apple does not pay a dividend, but about 40 dividend-focused funds hold its stock. And Apple shares can be found even in one high-yield bond fund.
Although such moves are permitted by securities rules and have so far paid off because of Apple's successes, they could expose investors to unexpected risks should the company falter. They also underline the leeway given to fund managers when choosing investments even when they explicitly contradict their stated objectives.
"It would clearly be inappropriate for a midcap fund to hold Apple. You've got to say that manager is violating his reason for being," John C. Bogle, founder of Vanguard Group said. "I can't help but believe that is going to end up in disappointment for his shareholders. I don't know when, but it will."
The reason Bogle and others are concerned is that any investors in these funds may not realize they have exposure to Apple, and indeed may have invested in the funds to get exposure to a different segment of the market.
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Investors' concentration in Apple raises the risk that a big reversal in its shares would reverberate beyond the technology sector.
Apple's popularity with investors of all stripes is a testament to its historic climb. The stock has soared nearly sevenfold since its March 2009 lows. In the past year alone, Apple has jumped 61 percent to close Tuesday at $568.10 a share, an all-time high.
The gains helped push the Nasdaq Composite Index, where Apple is the largest weighting, to close above 3000 on Tuesday for the first time since late 2000.
Managers of dividend funds argue Apple may soon pay a dividend, given its $100 billion in cash and signs from Apple chief Tim Cook that he would be more amenable to a payout than his predecessor.
Judith Saroyan at Eaton Vance Investment Managers bought Apple shares for two dividend-focused funds. She believes the company will pay a dividend within six months.
"Apple is a great company, it's well-managed, and if they do pay a dividend, they'll bring in a whole new set of investors," Saroyan says.