13F filings: what are they, who needs to file, and what can be gleaned?

Introduction

The financial markets can often seem opaque, with large institutional investors making moves that significantly impact stock prices while individual investors struggle to understand why. Form 13F filings help level this playing field by providing a quarterly glimpse into the holdings of major market participants. This article explores what 13F filings are, why they matter, and how to access them. 

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What Is a Form 13F?

A Form 13F is a quarterly report required by the Securities and Exchange Commission (SEC) that must be filed by institutional investment managers with at least $100 million in qualifying assets under management. These reports disclose the manager's equity holdings, providing transparency into the investment activities of the largest players in the market.

The legal requirement for these filings stems from Section 13(f) of the Securities Exchange Act of 1934, which was added by Congress in 1975 to increase investor access to information about institutional investment activities.

Who Must File Form 13F?

Institutional investment managers who exercise investment discretion over $100 million or more in Section 13(f) securities must file. These include:

• Investment advisers
• Banks
• Insurance companies
• Broker-dealers
• Pension funds
• Hedge funds and more

Notable filers include ‘super investor’ investment icons like Warren Buffett's Berkshire Hathaway, Ray Dalio's Bridgewater Associates, and Seth Klarman's Baupost Group, along with major asset managers like BlackRock, Vanguard, and Fidelity.

What Information Is Disclosed?

Form 13F reports include:

1. Holdings Information: The name of each security and its corresponding CUSIP number
2. Position Size: The number of shares held
3. Market Value: The value of each position at the end of the quarter
4. Investment Discretion: Whether the manager has sole or shared investment discretion
5. Voting Authority: Whether the manager has sole, shared, or no voting authority

What's Not Included in 13F Filings?

Understanding the limitations of 13F filings is just as important as knowing what they contain:

1. Short Positions: Only long positions are reported, creating an incomplete picture
2. Fixed Income Securities: Bonds and other debt instruments are excluded
3. Foreign Securities: Unless they're also traded on U.S. exchanges (such as ADRs)
4. Derivatives: Most derivatives like futures and swaps are excluded, though some options must be reported
5. Small Positions: Very small positions may be omitted under certain conditions
6. Cash Holdings: Cash and cash equivalents aren't reported
7. Intra-Quarter Transactions: Only quarter-end positions appear, missing trading activity during the quarter

Filing Timeline and Availability

13F reports must be filed within 45 days after the end of each calendar quarter:

• Q1 (January-March): Due May 15
• Q2 (April-June): Due August 14
• Q3 (July-September): Due November 14
• Q4 (October-December): Due February 14

This delay means the information is always at least 45 days old when it becomes public, which is an important consideration when using this data for investment decisions.

How to Access 13F Filings

13F filings can be accessed through several channels:

1. SEC's EDGAR Database: The official source for all SEC filings
2. Unusual Whales Institution Homepage: Your home for institutional trade data
3. Custom Alerts:  You can opt to receive a push notification whenever a new 13F is published.
4. Brokerage Platforms: Some brokerages offer 13F tracking tools for customers

Example 13F Custom Alerts

We've generated a few custom alert templates for you to quickly get started. Feel free to tweak any to your liking. Once you've clicked the link it will open a new window with the alert configuration preloaded. All you need to do is click “CREATE”.

All 13F Filings

All 13F Filings (Super investors only)

All 13F Filings involving AMZN

All 13F Filings involving Berkshire + Ackman

Strategic Uses of 13F Data

1. Following Successful Investors

Many individual investors use 13F filings to track the investments of fund managers with proven track records. While copying these trades isn't foolproof, understanding what successful investors are buying can provide valuable insights into potential opportunities.

2. Identifying Trends

By analyzing multiple 13F filings across different managers, investors can identify emerging investment themes or sectors gaining institutional interest. When several respected fund managers start building positions in the same industry, it may signal an opportunity worth investigating.

3. Monitoring Institutional Ownership

High or increasing institutional ownership can be a positive sign for a stock, potentially indicating professional investors see value. Conversely, a mass exodus of institutional investors might be a red flag.

4. Tracking Position Changes

Quarter-over-quarter changes in position sizes can reveal how institutional sentiment about a security is evolving. Significant increases or decreases in holdings may signal changing convictions.

5. Due Diligence Tool

For investors researching specific stocks, checking the institutional ownership profile through 13F data can be a valuable part of the due diligence process, helping confirm or challenge their own investment thesis.

Limitations and Pitfalls

While 13F filings provide valuable information, investors should be aware of several limitations:

1. Filing Delay

The 45-day reporting delay means positions may have changed significantly by the time the filing becomes public. In fast-moving markets, this information lag can be particularly problematic.

2. Incomplete Picture

Without short positions and with limited derivatives reporting, 13F filings present an incomplete view of an institution's strategy. A manager might appear heavily invested in a stock while simultaneously holding offsetting short positions through unreported instruments.

3. Window Dressing

Some managers engage in "window dressing" by adjusting their portfolios before the quarter's end to present a more favorable image, potentially masking poor decisions made during the quarter.

4. Confidential Treatment

Institutions can request confidential treatment for certain holdings if disclosure would reveal proprietary investment strategies, meaning some positions remain hidden from the public.

5. Context Matters

Without understanding a manager's overall strategy, investment horizon, or thesis for a particular position, following their moves can lead to misaligned decisions.