Data bank will let investor keep day-to-day track of 'smart money'
New York — What stocks did your mutual fund buy today? In the next few months, investors who have personal computers will be able to punch a button and call up a mutual fund portfolio on the screen. It will show a list of all stocks the fund is holding, as well as previous holdings and the buy-and-sell changes over the last quarter.
Welcome to the computer age, courtesy of Vickers Stock Research Corporation.
Over the years, this Huntington, N.Y., investment-research company has gained a solid reputation for turning out weighty statistical tomes each quarter on mutual funds, bonds, and other security instruments.
Now, capitalizing on the resurgence of equity mutual funds, it sees a bigger market developing for its services. ''We're going electronic to be able to reach more customers,'' says Joseph F. Dorsey, company chairman.
The service is not free, of course. Investors, registered representatives, and traders will pay from $150 to $200 a month to plug into the system, in addition to a connection charge of 50 cents a minute. But Mr. Dorsey, a former oil analyst, says the advantage of speed will make this charge worthwhile. Compared with published data, which he says is out of date the instant it's published, users of the electronic system will be able to obtain immediate access to portfolio information. He also hopes to reduce prices as the market develops.
''Investors who ask what the smart money is doing will be able to answer that question themselves by looking up the portfolio of their favorite mutual fund on a screen,'' says Dorsey, who claims that Vickers will be the first investment-research firm to offer the service on a dial-up basis.
The quarterly Vickers manuals contain thousands of listings of mutual fund holdings by institution. The company publishes these directories - Facts on the Funds and Stock Traders Guide are the two best known - and markets them to thousands of traders, institutions, and salesmen.
The privately held company is part of the Argus financial group based in New York City, of which Dorsey is also chairman. It was founded in 1954 by Sidney Vickers, a broker who had compiled a well-known report for institutions entitled Vickers Favorite 50 - The 50 Stocks Most Widely Held by Institutional Companies. The report has since been incorporated into the top 100 holdings of all institutions as reported quarterly in the Stock Traders Guide, a compendium of information of the stock-trading activities of more than 3,500 institutions.
The Facts on the Funds directory contains information on more than 500 different mutual funds. Its strength is its tabulation, in terms of dollar value , of those companies that have 10 percent or more of their shares owned by investment companies. It calls attention to industry groups that were being bought and sold most heavily in the quarter and lists the holdings of the 30 largest institutions in the United States, along with reports analyzing the portfolios.
The company puts out other reports, including one for bond traders, a directory of institutional investors, and combination stock-and-bond traders guides. It also prepares custom reports for corporation executives interested in knowing the institutional holders of the securities of their own companies. The reports are purchased by the institutions themselves, as well as by traders. Not many individuals buy them, Dorsey concedes. Much of the information is gathered from reports filed with the Securities and Exchange Commission and state regulatory agencies, but the manuals also include information from individual investors.
This information will be available shortly in electronic form to any investor , registered representative, or trader who has access to a personal computer and a telephone modem.
The system works this way: An investor wanting to examine a portfolio will be able to dial on his telephone a toll-free 800 number linked to Vickers offices. He then enters his name in the computer along with a secret code number assigned by the company. By keying in the ticker symbol of a stock, the investor will obtain a list of all the institutions holding that stock as well as the previously reported holdings and the buy-and-sell changes in the previous quarter. He will also receive summary information on institutional holdings and information containing names and telephone numbers of institutional traders.
Vickers spent approximately $500,000 developing the system over the past few years. Although 10 percent to 15 percent of the company's revenues are currently derived from the sale of machine-readable data, Dorsey expects this share to increase to over 50 percent within two years, reaching approximately $1 million in sales.
Whether the company in its present form can sustain the service remains to be seen. Traditionally, Vickers and Argus have sold to a well-defined market of professionals in the investment community. With the development of electronic communications of investment data, those markets will be vastly broadened and new sales strategies undoubtedly will have to be adopted.
In the initial stages, at least, Dorsey admits that demand is expected to tax delivery capabilities. ''If we are to serve the retail markets,'' he says, ''it seems likely that a far broader sales and marketing staff will have to be developed.
''The telephone permits an analyst to develop a personal relationship with the customer and to provide up-to-the-minute changes in his opinions. But he can only deal with one customer at a time. The printed report permits him to talk to many customers, but it becomes obsolete five minutes after it's published. Electronic communication permits immediate exchange and trade distribution simultaneously.''
Vickers plans to continue publishing its manuals. For $695 a year for the Stock Traders Guide and $150 for Facts on the Funds, they can be obtained from Vickers Stock Research Corporation, 226 New York Avenue, Huntington, N.Y. 11743.