Form 13F filings offer windows into the investing process of the best investors in the world. These forms are quarterly check-ins on the portfolios of investors like Warren Buffett and Berkshire Hathaway, and give retail investors real-world insights on how the biggest and best manage their investment portfolios. They can be a source of new ideas or of investing lessons. There are limitations to what a 13F says, but they are a resource investors would do well to consult on a regular basis.
Let’s walk through the basics of what the form 13F (or 13F form) is, where you can find them, and how you might use them.
What are Form 13F filings?
Form 13F filings are quarterly reports that institutional investment managers with over $100 million in qualifying assets under management are required to file with the US Securities and Exchange Commission (SEC). These forms disclose the manager’s long positions in publicly traded securities, such as stocks and exchange-traded funds (ETFs), as of the end of the quarter preceding the filing.
13F refers to section 13(f) of the Securities Exchange Act of 1934, as part of the inception of modern securities regulation after the 1929 crash and the start of the Great Depression.
A 13F filing will contain a cover sheet with the signature of the manager or a representative, as well as a statement of how many positions are disclosed in the form, and how much those positions are worth. For example, in Berkshire Hathaway’s Q3 2022 13F filing, they disclosed 179 positions worth $296 billion dollars. Instead of Warren Buffett signing the form as CEO of the company, Marc Hamburg, the Senior Vice President and CFO of Berkshire Hathaway, signed.
The more interesting part of 13F filings will be the information table that contains, in this example, those 179 positions. The table of 13(f) securities will include the name of the underlying stock – Activision Blizzard Inc, for example – whether the position is in common shares, preferred shares, a put or call option, a warrant, or another type of security; how many shares are owned, and the fair market value of the securities listed at the end of the calendar quarter.
This is where the meat of the 13F filing is, in showing the details of how much a given fund or famous investor owns in which stocks. As we’ll discuss, qualified investment managers have to report these holdings four times a year, so investors can watch these positions and strategies evolve over time.
Who is required to file Form 13F and what are 13(f) securities?
Institutional investment managers with U.S. operations – “that use the United States mail (or other means or instrumentality of interstate commerce)” as the Securities Exchange Commission (SEC) puts it – and manage over $100M in 13(f) securities have to file a Form 13F.
13(f) securities include U.S. exchange-traded stocks, exchange-traded funds (ETFs), options, warrants, and some convertible debt securities. The SEC publishes a list of securities that fall under Section 13(f) at the beginning of each quarter.
The investment manager must file these forms once they cross the $100M threshold in 13(f) assets at the end of any given calendar month, and are obliged to file for the following calendar year, even if their assets dip back below that level.
When is Form 13F filed and what are the filing requirements?
The Form 13F filing deadline is 45 days after the end of each quarter. The forms are released to the public through the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.
For example, a manager required to file a Form 13F based on their funds crossing the $100M threshold in a given year would file their first required Form 13F filing for the fourth quarter of that year by February 14th of the following year. If that day falls on a Saturday or Sunday, the filing date gets pushed back to the following Monday. The most typical 13F filing dates are February 14th, May 15th, August 14th, and November 14th, give or take a day or two.
Investment managers will usually wait until the last moment to file so as to not give away what changes they made to their portfolio in the prior quarter. As investment managers view their stock picks as their private efforts or intellectual property, they will sometimes complain about the 13F disclosure requirements, and as a result are unlikely to file these forms early.
The requirements are that any manager above the $100M threshold file the form disclosing all of their positions for 13(f) securities. Filers can request confidential treatment for certain positions, meaning they would disclose the position to the SEC confidentially and omit those positions from the public version. These are most typically applied to risk arbitrage positions.
Why do Form 13F filings matter?
Form 13F filings are important because they provide insights into the investment strategies and portfolio holdings of large institutional investors. Individual investors may find it useful to track the holdings of successful institutional investors, as those institutional investors often have the resources and expertise to conduct extensive research and due diligence on potential investments far beyond what the retail investor can do. Additionally, the 13F filing provides transparency into the investment activity of these institutional managers, which can be beneficial for market participants.
How to find 13F filings
13F filings are most directly available through the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. Investors can search for Berkshire Hathaway or Greenlight Capital or Third Point to find the latest filing for a given fund.
Many sites compile and track these holdings to make it more easy for investors to find, digest, and use these forms. As one present example, InvestingPro+ tracks the 13Fs for thousands of big name investors to make it easy for investors to not only see the changes in a given firm’s holdings from quarter to quarter, but also to compare investors’ performance based on the 13F filings, and to get analysis on whether the stocks those investors hold are worth investing in.
How can investors read Form 13F filings for their own investing?
There are several ways that investors can use 13F filings to their advantage. One approach is to identify institutional investors with a track record of outperforming the market and to track their current holdings. This can provide ideas for potential investments and help investors to diversify their portfolio beyond what they could do with their own research.
Another approach is to use 13F filings to identify potential investment themes or trends. For example, if a number of institutional investors are increasing their exposure to a particular sector, it may be worth considering adding that sector to one’s own portfolio. Conversely, if a number of institutional investors are decreasing their exposure to a particular sector, it may be worth reviewing one’s own holdings in that sector.
Form 13F study can be especially helpful for either thinking outside the box or pursuing a familiar theme. On the one hand, looking at 13Fs of famous investment managers who invest in different styles can expose the investor to new ways of looking at the market. A value investor that holds a growth stock, for example, might surprise an individual investor and open their eyes to a new way of looking at ‘value’. Or a group of different managers all owning the same two or three stocks might be a sign of an idea that the retail investing community has missed (or conversely, a ‘hedge fund hotel’ – an idea that big money has crowded into and that could sink if things go wrong).
On the other hand, finding institutional investors who hold stocks that are in your portfolio could send you down a path to new ideas. On InvestingPro+, you can search through the Ideas section by portfolios that hold a specific company.
So if you hold shares in, say, Microsoft, and you want to find investment managers who hold Microsoft and have certain other parameters – they performed well last year and only own 30 or fewer stocks, for example – you can run that search. As of January 9th, 2023, that would yield 16 funds or investment managers, including big names like David Tepper, which could give the investor a focused way to find new ideas.
What are the limitations to the Form 13F?
It’s worth noting that the 13F filings only disclose long positions, so they do not provide a complete picture of an institutional investor’s portfolio. For example, the forms do not include short positions, derivatives, or other securities that may be held by the manager. So the investor looking at a Form 13F will not see the whole picture.
We should also emphasize that the 13F filing comes out 45 days after the end of a quarter. A lot can happen in 45 days that might change a firm’s strategy or its thinking about an investment.
It is important to remember that a Form 13F filing should only be the starting point to research. Warren Buffett may add a stock to Berkshire Hathaway’s investment portfolio, but he won’t tell you why he’s holding it or for how long he plans to hold it – and in Berkshire’s case, it’s not easy to tell if it’s actually Mr. Buffett who bought the position or one of his deputies. Getting ideas from the best is smart, but each investor has to own their own research and decision-making process.
An investor can use a 13F as a starting point – and coming up with a new idea is often the hardest thing to do – and then use other tools to decide whether the investment is a good one. InvestingPro+ provides a snapshot of all the disclosed positions in a given 13F along with the past performance of that firm’s picks – just based on the 13F – and the InvestingPro+ fair value for each stock in the portfolio, and analysts’ estimates. It also makes it easy to see what the institutional investor’s biggest buys and sells were in the past two quarters.
Conclusion
Overall, Form 13F filings are an important resource for investors as they provide insights into the investment activity of large institutional investors and can help to inform investment decisions. By tracking the holdings and investment strategies of successful institutional investors, individual investors can potentially identify new investment ideas and make more informed decisions about their own portfolio. However, it’s important to remember that 13F filings should be just one piece of the puzzle. Investors should carefully consider all relevant information before making any investment decisions.
Find The Best Investors’ Portfolios
Individual investors use 13F filings to get insights on the best investors in the world, and to find new years.
Looking for your own new ideas? To see the latest positions of the biggest investors in the world, including their biggest buys and sells, and to get a neutral estimate of the fair value and thousands of data points on each stock in each investor’s form 13F filing each quarter, so you can find the best stocks for your portfolio, check out InvestingPro+. The research tool makes it easy for you to follow the greatest investors in their world and see what they’re buying, how those picks are performing, and figure out whether those are good picks for you.
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