Google slump hits top fund managers

Google’s slump in share price last week affected a number of fund managers after quarterly profits dropped by 20 per cent.

The internet giant saw its share price. suspended after a printing error meant its interim results were released earlier than planned, prompting the share price to dive.

It was widely reported US-based financial printer RR Donnelley had filed its earnings statement without authorisation, prompting the sell-off. Despite rallying slightly after shares were reinstated for trading on the Nasdaq, Google finished the day’s trading more than 8 per cent lower.

Announcing the company’s third quarter results, Google chief executive Larry Page said it had had a strong quarter with revenue up 45 per cent, year-on-year.

However, this did not hide the 20 per cent year-on-year drop in net profits for the third quarter, which slipped to just under $2.2bn from $2.7bn.

The company is a top 10 holding in Jeremy Podger’s £1.2bn Fidelity Global Special Situations fund, representing 2.4 per cent of the portfolio. Podger says the holding is one of the companies in his “unique business” part of the portfolio, typefied by companies with a dominant industry position.

The manager says: “Clearly, it has a very dominant position in not just one area, it is unique in other areas.”

Google also features in the top 10 holdings of the £1.3bn BlackRock CIF North American Equity Tracker fund, the £1bn Fidelity American fund, managed by Aris Vatis, and the £1.2bn JP Morgan US Select 130/30 fund.

However, the company makes up a 10 per cent holding in the €303m Fidelity Funds Global Technology fund, managed by Dmitry Solomakhin, the fund’s largest holding.

It is also a large consitutent of other technology funds including the Henderson Global Technology and Polar Capital Technology, both of which have exposures of more than 6 per cent.

AWD Chase de Vere head of communications Patrick Connolly says: “When you are picking a fund, you need to decide whether you want a managerto take big bets or be more diversified. If you go with one who takes big bets if it comes off, you will do very well, if not, you are taking a big risk.”