Top Holdings
Categories: Mutual Funds
NFL linemen talk about this one all the time. But no refs involved.
In fact, top holdings are tracked by a bunch of mutual fund brokers who closely follow the investments of behemoth mutual fund houses. Fidelity, Franklin, American Funds, and others have funds worth tens of billions in assets under management. Those funds generally publish their top 10 holdings. So like...Magellan (Fidelity's flagship fund) might have, as its third largest position, $1.3 billion in MSFT. If suddenly that holding is published at "just" $900 million, then it appears that Fidelity is selling its position. And yes, the top 10 list is usually tracked in both dollar value and number of shares.
The presumption is that the pros know what they're doing (not a great presumption), and that Fidelity has thus gone bearish on MSFT and is moving out of the stock. In practice, the numbers are usually reported months after transactions have already happened, so they're not a great indicator of that house's investment sentiment on a given stock. But they do give a lean one way or another as to how the collection of portfolio managers is thinking about a particular stock or sector.
So read it. But with many grains of salt.
