Rogoff characterised Apple as ‘a genuine special situation’, noting that it was simultaneously now his largest holding and his second largest underweight. The company accounts for 7% of his portfolio, a stake worth £42 million.
‘Although we believe that Apple’s best years of growth are behind it, the company appears to understand the pitfalls involved with chasing incremental growth, evidenced by the higher than expected price point of its low-end handset,’ Rogoff explained.
‘As such, Apple may yet defy the so-called innovator’s dilemma as it manages itself along the lines of other mass affluent brands such as Audi or Coach, a view well supported by the recent hire of the Burberry chief executive officer.’
Rogoff added that Apple’s huge cash pile, equivalent to around a third of its market capitalisation, created a ‘more attractive risk-reward for Apple going forwards’.
In the six months to 31 October Rogoff’s fund returned 12.6% on a net asset basis and 17.1% by share price, compared with 8.9% from its benchmark Dow Jones World Technology index and 7.7% from the S&P 500 through the same period.