Friday, February 25, 2011

Institutional Voyeurism: Gold and Gold Miners

Some years ago I did more writing on Institutional Voyeurism.  There is something fascinating about taking a peek under the hood of institutional holders' (IH) portfolios.  I indulged this fascination this morning upon waking with the idea of wanting to look at the composition of IV's in both GLD and GDX that had these tickers as a top 5 position. 

My favorite place to go on IV's is J3SG  My data is from their website.  Here's the table that I prepared showing institutions group by the ranking of each ticker in their portfolio (click all images for enhanced viewing).  

What is this table saying?

GDX:  52.5% of the dollars are held by 6.4% of  the total IHs as a top 5 holding.
GLD:  42.8% of the dollars are held by 16.6% of the total IHs as a top 5 holding.

Let's take a closer look at this composition:

 Forty-nine % of holdings are held by three IH's:  Julius Baer (32%/position rank 1 in portfolio), Blue Ridge Capital (10%/position rank 4 in portfolio) and Greenlight Capital (7%/position rank 8 in portfolio).  Seems very lopsided to my eye.  Let's look at GDX's kissing cousin, GLD:

 GLD is enjoying more diversity of distribution. <1% holders comprise 46% of the holdings.  The other notable large holders are Paulson (16%), Northern Trust (8%) with the balance of holders distributed as 5% and less.

What conclusions can be drawn?  The obvious is that there appears to be a rather heavy concentration in these funds among just a few AND that concentration is a top holding in the portfolio.  In contrast,  USO, for example, while having concentrated holding among the big investment banks, does not have such a high percentage of top 5 portfolio ranks. 

This may just fall into the category of interesting, not actionable.  But I thought I would share it with you.