Apple Is a Hedge Fund That Makes Phones

www.wsj.com

It's not all bad in the land of Apple though as Thomas Gilbert and Christopher Hrdlicka remind us:

When you buy a share of Apple stock, you do not simply buy into a $1 trillion technology company. You also buy a share of one of the world’s largest investment companies: Braeburn Capital, a wholly owned subsidiary of Apple. Braeburn manages a $244 billion financial portfolio—70% of Apple’s total book assets. Apple acts like a hedge fund by supporting this portfolio with $115 billion of debt.
Like a hedge fund, Apple provides minimal disclosures on Braeburn Capital’s holdings. But unlike a hedge fund, Apple does not restrict itself to accepting funds from sophisticated investors. Apple invests the money of everyday investors, like a mutual fund—but without telling investors what they own, the most basic protection mutual funds offer.

Braeburn has long been a very secretive part of Apple's sauce. This helps shed some light on the (rather fascinating) work they're doing with all that money...

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