Fund Managers Cut Apple and Nvidia Holdings for Banking Stocks

TLDR

Table of Contents

Fund managers are cutting Apple and Nvidia holdings, with Apple down to 3.3% weighting versus 6.3% benchmark and Nvidia at 3.6% versus 5% benchmark
CalPERS sold 5.1 million Apple shares in Q1 while adding positions in Meta, AMD, and McDonald’s
Wells Fargo and Bank of America are the most overweighted stocks as managers favor financials over tech
50% of actively managed large-cap funds are now outperforming benchmarks compared to historic 37% average
Apple shares down over 20% in 2025 while Tesla fell 15%, making tech rotation a winning strategy

Major fund managers are selling their Apple and Nvidia positions as they shift money into financial and healthcare companies. A Goldman Sachs study of 541 large-cap mutual funds shows this rotation away from tech stocks is paying off.

The analysis covered funds managing $3.5 trillion in total assets. These managers now hold just 3.3% of their portfolios in Apple stock compared to the benchmark weight of 6.3%. Nvidia holdings dropped to 3.6% versus the 5% benchmark target.

Other tech giants also saw cuts. Microsoft, Tesla, and Alphabet all ranked among the 10 most underweighted stocks in these portfolios. Chip company Broadcom was the sixth-most reduced holding.

The California Public Employees’ Retirement System (CalPERS) made similar moves in the first quarter. The nation’s largest pension fund sold 5.1 million Apple shares, bringing its total holdings down to 34.7 million shares. CalPERS manages over $540 billion in assets.

Apple stock has fallen more than 20% so far in 2025. Tesla shares dropped over 15% during the same period. These declines make the fund managers’ tech reduction look smart.

Banking Stocks Lead the Way

Wells Fargo became the most overweighted stock among active fund managers. Bank of America ranked as the second-most overweighted position. Credit card companies Visa and Mastercard also made the top overweight list.

Financial stocks have performed well this year. The Financial Select Sector SPDR ETF gained nearly 4% in 2025. Banks benefit from hopes of Federal Reserve interest rate cuts and potential deregulation under the Trump administration.

Merger activity in the banking sector has also increased recently. This creates more opportunities for financial companies to grow through acquisitions.

Healthcare Picks Show Mixed Results

Fund managers increased their healthcare holdings too. Medical device maker Medtronic and insurance company Cigna received extra investment. Medtronic shares stayed flat while Cigna stock jumped nearly 15% this year.

New Tech Favorites Emerge

While cutting Apple and Nvidia, CalPERS added to other tech positions. The pension fund bought 579,150 Meta shares, raising its total to 5.5 million shares. Meta’s digital advertising business continues to perform well despite platform challenges.

CalPERS also doubled down on AMD stock. The fund added 325,180 shares to reach 3.3 million total shares. AMD beat earnings expectations and raised guidance for the year. The company signed a major AI computing deal in Saudi Arabia.

McDonald’s got a boost too. CalPERS bought 494,290 more shares for a total of 3.5 million shares. The fast-food chain used branded promotions like Minecraft Happy Meals to help second-quarter sales.

Not all healthcare bets worked out. UnitedHealth Group was another overweighted stock that fell over 40%. The insurance company faced earnings problems and management changes that hurt its stock price.

This rotation strategy is working for fund managers. About 50% of actively managed large-cap funds now beat their benchmarks. The historic average is just 37% of funds outperforming.

CalPERS said its stock moves were based on systematic decisions rather than emotional reactions to market changes.

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