Skip to Content
Fund Times

Some Equity-Income Funds Have Already Bitten Apple

Vanguard adds to its fund board and more.

Mentioned: , , , , , , , , ,

 Apple's (AAPL) almost five-fold jump in its share price over the past three years has boosted the results of most large cap growth funds. Morningstar data show the stock is both a significant holding (5.6% of assets for the average large-cap growth fund) and the category's top performance contributor during that time period. Now, though, Apple's announcement that it will use some of its $100 billion cash position to pay a dividend could affect another group of funds: equity-income offerings.

Equity-income funds primarily focus on dividend-paying stocks. The table below lists a sampling of these funds that already own Apple shares (along with other dividend-focused offerings). The positions aren't that large. Indeed, even Apple's 20% increase over the past month hasn't catapulted most of them to the top of the category rankings in 2012. What isn't apparent from the table, though, is what Apple is doing in these portfolios in the first place. After all, it just announced it would start paying a dividend. In the case of many equity-income funds, such as  Fidelity Equity-Income (FEQIX), for example, there are no strict limits on what the fund can own. Instead, the manager aims to have a dividend yield greater than that of the S&P 500. So, some stocks in these portfolios may have a low yield or none at all.

To view this article, become a Morningstar Basic member.

Register for Free

Morningstar Fund Analysts does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.