NEW YORK: As Google-parent Alphabet became on Thursday the fourth US company to top a market value of more than US$1 trillion, some funds holding its shares are wondering whether now is the time to cash in on the stock's extraordinary gains.
Alphabet joins Apple, Amazon.com and Microsoft as the only US companies to hit US$1 trillion in market value. Alphabet's shares are among a small group of stocks found in the top holdings of both mutual funds and hedge funds, two types of institutions whose investing styles tend to be markedly different, a Goldman Sachs analysis showed. That could leave it exposed to volatile price swings if sentiment suddenly changes.Despite those concerns, many investors are finding it hard to say goodbye.
Scott Goginsky, a portfolio manager of the Biondo Focus fund, has held off adding to a longstanding position over the last year, concerned that the company's costs are likely to increase due to its efforts to pre-empt any additional regulatory measures from Washington. That could cut into the margins of businesses like YouTube if it needs to hire additional workers to vet user-posted content, he said.
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