In the last half century, institutional investors have been playing an increasingly significant role in the equity markets. Total US institutional equity holdings rose from $8.7 billion in 1950 (6.1%) to a stunning $1,432.9 billion (40.6%) by 1990.
In the UK, the share held by individual investors has shrunk from 54% in 1963 to just 10.7% in 2012, reflecting the ever-growing dominance of institutional money.
Due to their sheer size, institutional investors often move markets. Famous momentum investor William J. O’Neill describes these institutional investors as being “as obvious as the elephant that jumps into the bathtub and splatters water all over the place”. When they get in or out of a stock, they can send huge ripples through the markets.
Hunting for Elephants
So how do individual investors best screen for their presence? Institutional ownership (IO) is the percentage of a stock’s float owned by institutions such as unit trusts / mutual funds, pension funds, endowments, hedge funds or other large investors. Most well-known stocks – e.g. household names like BP or Shell – would have at least 25% institutional ownership. Stockopedia’s forthcoming Ownership Module allows you to filter the market for high, low, increasing or decreasing IO.
The reason why individual investors…
Disclaimer: Please note all prices are for information only, they should not be relied upon for accuracy or trading. All prices quotes are based on CFD prices and are similar though not always identical to real exchange prices. STOCKTRKR or anybody connected with STOCKTRKR will not accept any liability for loss or damage arising from use of any information/commentary/charts or articles which is provided 'as is' for educational purposes only, nothing contained on this website should be considered as investment advice - please seek proper investment advice from registered financial broker or institution if you wish to trade on global markets and ensure you are familiar with the risks.
