Active managers in both the mutual and hedge fund industries are badly underperforming their peers, and they have a mutual malady: heavy ownership of flailing tech giant Apple. The Cupertino, Calif.-based maker of electronic gizmo wizardry is the fourth-most owned company by the top 50 mutual funds and the fifth-most owned by hedge funds.
With Apple shares down 16 percent this year, it's played a heavy role in the inability of active managers to beat the basic Standard & Poor's 500 benchmark.
"The deterioration in performance really commenced after March," Thomas J. Lee, chief market strategist at JPMorgan Chase, said in an analysis. "This is when cyclicals began to meaningfully outperform defensives, and the underperformance has worsened steadily since….”