A firm focused on low-volatility equity investments made adjustments in its portfolio in the first quarter.
Gateway Investment Advisers trimmed its stake in
Apple
stock (ticker: AAPL), slashed its General Electric (
GE
) investment, and bought up
Altria
Group stock (MO). Gateway disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.
Gateway didn’t respond to a request for comment on the investment changes.
The firm is closing in on 50 years of focusing on reducing equity-investing risk with option strategies, and it had $8.6 billion in assets under management as of Jan. 31, 2022. The stance beat the market in 2022 by losing less. Gateway’s flagship strategy produced a total return last year of negative 11.7%, compared with an 18.1% drop in the
S&P 500 index.
It should be noted, though, that the aim of the strategy isn’t to top the index, but to deliver a majority of the long-term return “with less than half the risk.”
The firm sold 333,702 Apple shares in the first quarter to lower its investment to 3.6 million shares of the iPhone maker. Apple stock slid 27% in 2022, but so far this year it has gained 27%, compared with a rise of 7.8% in the index.
Value-investor
Warren Buffett
earlier this month expressed his affection for Apple stock, which comprises a large part of the holdings of his Berkshire Hathaway (
BRK.b
). Apple just opened its first stores in India. A slump in global demand for computers this year, however, has hit the largest PC makers, and Apple hasn’t been an exception.
A recently slimmed down GE, however, has been seeing more demand, particularly for its renewable power generation. Since spinning off
GE HealthCare Technologies
(GEHC) at the beginning of 2023, GE has been a topic of speculation by Wall Street. At least one analyst thinks the company should combine its aerospace operations with those of
Honeywell International
(HON).
GE stock has surged 46% this year. Gateway sold 211,621 GE shares in the first quarter to cut its investment to 82,363 shares.
Altria stock has slipped 1.5% year to date, following a 3.5% drop in 2022. Gateway bought 148,409 more Altria shares to end the first quarter with 1 million shares.
Altria CEO Billy Gifford told Barron’s in March that the company’s dividend—whose yield tops 8%—is “a top priority for investors and for us.” The maker of Marlboro cigarettes noted that using its dividend to return capital is popular with its income-oriented retail base. In March, Altria divested itself of e-cigarette maker Juul Labs, recording a loss of at least $12.5 billion.
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at edward.lin@barrons.com and follow @BarronsEdLin.
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