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Top holdings give institutions a mixed bag

Correlations to the Nasdaq Composite index rose for four of the top five institutional equity holdings as the index fell 12% since the end of the third quarter. Johnson & Johnson, a consumer discretionary standby, was insulated from the market's decline and saw its historically low correlation fall further. While the consumer products company remained in positive territory during that period, only Apple and Google failed to outperform the index on a relative basis; the former has fallen 22.8% since Sept. 30. Correlations tend to increase in periods of market stress for more growth-oriented companies, particularly as investors sell those shares in favor of those more insulated from market declines.

Apple shares fell during the fourth quarter on concerns surrounding iPhone demand and what impact China-targeted tariffs will have on the company's profitability. Microsoft's run, aided by Apple's decline, has propelled it to the most valuable company in the index as investors moved technology allocations to the sector's terra firma.