On Friday morning, General Electric (GE) announced that it is selling most of its assets of GE Capital. Here’s what the news means for mutual fund investors.
Inside the News
The company reported that it will sell the majority of its assets in its real estate business for $26.5 billion. GE noted that its major buyers include Blackstone (BX) and Wells Fargo (WFC), but there are other buyers interested in smaller stakes.
GE reported that this move will help free up cash to return to shareholders in the form of share buybacks and dividends.
Cutting Back On Finance
Since the financial crisis, GE has been cutting its GE Capital business to make the overall company less risky for investors. Despite its efforts to reduce its financing business, GE Capital is still one of the biggest banks in the U.S.
GE is up over 10% in 2015, outperforming the S&P 500 index.
Mutual Funds to Watch
Investors considering a stake in GE may be interested in the funds listed below. These funds currently hold the largest stakes in the company.
| Symbol | Mutual Fund | Stake |
|---|---|---|
| VTSMX | Vanguard Total Stock Market Index | 1.74% |
| VFINX | Vanguard 500 Index | 1.11% |
| FKINX | Franklin Income | 0.47% |
The Bottom Line
The funds above offer investors exposure to a diverse group of securities and industries. Investors interested in GE may also be interested in Caterpillar (CAT) or United Technologies (UTX).
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