Many of the biggest mutual fund families, including Fidelity Investments, Janus Capital and Putnam Investments, reduced their holdings in Microsoft sharply in the second quarter, according to recent regulatory filings.

Fidelity cut its holdings by 36 per cent - to 119 million shares - as the software maker was hit with a federal court decision that the company had abused its monopoly power in the software market and should be broken up.

Janus cut its holdings by 47 per cent - to 18.1 million shares - and Putnam lowered its holdings by 14 per cent - to 48.4 million. from 56.5 million.