Yes, and for good reason, says Neil Dwane, global strategist at Allianz Global Investors, who says investors are leaning more on that old favorite Microsoft Corp. MSFT, -1.30% as regulatory wagons circle around some popular names in the tech, internet and media space.
While Microsoft isn’t one of the quarter’s best performers, with a gain of just over 3%, it’s the seventh best performer year to date with a 37% gain. That puts it right up there in the top ten with defensive names like Lockheed Martin LMT, -1.29%, Mastercard MA, -1.74% , Costco COST, -0.80% and Starbucks SBUX, -1.59%. Amid growing concerns about the U.S.
Dwane said Microsoft’s has also become a go-to stock by investors who are scared by regulation surrounding other big popular names, such as some of the big FANG members. That acronym can be stretched to include Apple — FAANG. “I think the momentum behind Facebook and Alphabet is constrained by tax regulation in Europe and by the Justice Department investigations into their monopolies which will end up with them being broken up,” said Dwane. And obviously Apple is constrained by the fact that its new business model is to undercut everyone from Disney to Netflix..and to cut their iPhone prices by 35%,” he said.