Although Montgomery Asset Management of San Francisco recently joined two web-based fund start-ups in the unusual practice of revealing individual stock holdings instantaneously or with a slight delay, other established mutual fund companies are not likely to do the same, said fund executives.

Fund companies are more likely to stick to the SEC requirements that they reveal their holdings only two times a year, fund executives said. At most, they are likely to reveal their top 10 holdings, perhaps on a quarterly basis, the executives said. To reveal holdings more frequently is time-consuming and may prompt shareholders to abandon a fund in favor of individual stocks, executives said.

Furthermore, portfolio managers invested in stocks that are thinly traded, or who are in the process of building up or disposing of large blocks of shares, do not want these activities known, executives said.

"Transparency is a battle between sales/marketing, and the portfolio managers, who are especially wary of revealing holdings on illiquid stocks," said Greg Johnson, president of Franklin Templeton of San Mateo, Calif. Fund companies are more likely to reveal holdings data to financial intermediaries than to investors directly, said John Payne, a research consultant with Cerulli Associates of Boston.

Montgomery Asset Management, nevertheless, believes that investors are interested in knowing about portfolio managers' buy and sell decisions, particularly since fund portfolios turn over 90 percent of their holdings every year, said Peter Greenley, a Montgomery spokesperson. Investors want to know about the dramatic changes that can occur in portfolios, Greenley said.

Montgomery is addressing what it believes is investors' curiosity with a new line of so-called "focused" funds that will reveal trades two weeks after they occur. Montgomery will also e-mail shareholders explanations of managers' decisions to trade.

In addition, every 20 minutes, Montgomery will post on its website the share price and trading volume of each of its holdings, as well as what percentage of the total portfolio each holding represents. The website also includes detailed company profiles on each of a fund's holdings.

Montgomery introduced its first focused fund, the Montgomery U.S. Select 20 Portfolio, in early April.

Montgomery is hoping the holdings information will gain the attention of investors and attract assets, Greenley said. The firm is trying to discourage individual traders from taking advantage of the information to trade for their accounts by imposing a two percent redemption fee for the first six months, and by only sharing two-week-old information with shareholders at a secured website, Greenley said. of San Francisco, with $40 million in assets under management, and of Culver City, Calif., with $3.5 million in assets under management, are informing investors about buys and sells in their funds' portfolios as these trades occur. Both companies say they have been able to build investor loyalty and assets through this unusual strategy.'s portfolio managers have been able to improve fund performance with stock tips from investors, said Dave Nadig, co-founder and executive vice president of

"There have been occasions when people have pointed out a particular company or investment area to us that we were not aware of," Nadig said.

Having to answer challenging questions from investors has also made's portfolio managers keener, Nadig said.

By revealing its holdings instantaneously, may be identifying good stock picks for investors who might cash out and invest on their own, Nadig said. But, it is not a major threat because of the time and expense an individual investor would have to invest to track's trading activity, he said.

"There is absolutely no reason why people couldn't run a version of the fund on their own," Nadig said. "Some people have even flat-out told us that they were going to mimic us. But we make 50 to 60 trades a day and it's a full-time job. We also have access to better executions and IPOs that individuals don't have."

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