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Wednesday, 23 August, 2000, 21:51 GMT 22:51 UK
US funds cut back on Microsoft
Microsoft share holders mob Bill Gates for autographs at the firm's annual general meeting in 1999
Microsoft chairman Bill Gates is popular with shareholders, but fund managers monitor the firm's big trial.
Worried about the Microsoft anti-trust trial, large US investment funds have begun to cut back sharply on their share holdings in the software maker.

The survey by First Call Sharewatch covers the period April to June, after Microsoft was found guilty of abusing its monopoly power in the software market and told to split in two.

The sell-off coincides with the global plunge for share prices for technology companies, and data for the third quarter of the year are not yet available.

But while the shares of many other software firms suffered as well, First Call's research shows that funds sold Microsoft while they bulked up on technology stocks like Cisco Systems.

Microsoft - the sellers

Fidelity Investments, which controls one of the world's largest family of funds, reduced Microsoft in its portfolio by 36%.

Janus Capital sold 47% of its Microsoft shares, while Putnam Investments placed 14% of its holdings on the market.

Other big sellers were American Century, T.Rowe Price, Oppenheimer Funds and AIM Management Group.

Well-known investment banks also reduced their stakes in Microsoft, among them Goldman Sacks, Bankers Trust and American Express Financial Advisers.

Better opportunities

Microsoft's case is set to go through a long appeals process, and many investment funds are concerned the trial will affect Microsoft's share price.

Richard Peterson, market strategist with Thomson Financial Securities Data, said it was significant that not just one but several funds were moving in the same direction.

He said the sell-off reflected not only concerns about the outcome of the trial, but a belief in better opportunities elsewhere in the market.

Fund managers who want to invest in technology stocks know "better money can be made elsewhere faster", Mr Peterson said.

Fund industry consultant Geoff Bobroff said the Microsoft sell-off was similar to that of companies involved in earlier anti-trust cases, like AT&T and IBM.

"If we go back and look at the AT&T and IBM anti-trust cases, for many years after the decisions their stocks were in the dog house", Mr Bobroff said.

On Wednesday, Microsoft shares closed at $70.75, down half a dollar, and well below the 52-week high of just under $120.

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