Ken Griffin, a billionaire known for his savvy stock-picking acumen through his Citadel Advisors hedge fund, has amassed a colossal net worth of around $43 billion. A staggering sum by any measure.
Yet, amidst his triumphs in individual stock selections, Griffin’s investment strategy embraces a broader canvas that includes the adoption of exchange-traded funds (ETFs). Let’s dive into two ETFs that have captured Griffin’s attention and funds.
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The SPDR S&P 500 ETF Trust: A Core Holding
Griffin’s Citadel hedge fund has taken a sizable position in the SPDR S&P 500 ETF Trust (NYSEMKT: SPY), owning 5.6 million shares valued at $3.05 billion as of June 30, 2024. This marked a significant increase from the previous quarter, with Griffin adding around 2.03 million additional shares, boosting Citadel’s stake by a substantial 56.7%.
Debuting in the U.S. in January 1993, the SPDR S&P 500 ETF Trust reigns as the largest in terms of assets under management (AUM) at $603.7 billion. It also stands as one of the most actively traded ETFs in the market.
This ETF mirrors the S&P 500 Index, featuring major players like Apple, Nvidia, Microsoft, Amazon, Meta Platforms, and Alphabet among its top holdings.
Why does Griffin favor this ETF? Several factors likely play into his decision.
Griffin is known to advocate for diversified portfolios, evident in Citadel’s 5,800+ holdings. The SPDR S&P 500 ETF Trust offers a convenient way to tap into the performance of the 500 largest U.S. companies in a single move.
Historically, this ETF has been a stellar performer, boasting an average annual return of nearly 10.5% since inception and a robust 23% gain in 2024 alone.
The Invesco QQQ Trust: Another Strong Bet
Griffin’s hedge fund also holds a significant stake in the Invesco QQQ Trust (NASDAQ: QQQ), possessing 3.3 million shares valued at $1.58 billion as of June 30, 2024. Notably, Griffin substantially bolstered Citadel’s position in this ETF during Q2 by acquiring roughly 2.82 million additional shares, enhancing the hedge fund’s ownership by an impressive 585%.
Ranked as the fifth-largest ETF by AUM, the Invesco QQQ Trust has demonstrated robust trading volume over recent months, trailing only the SPDR S&P 500 ETF Trust.
This ETF mirrors the performance of the Nasdaq-100 Index and holds positions in the 100 largest stocks on the Nasdaq Stock Market, featuring top players like Apple, Microsoft, Nvidia, Broadcom, Meta Platforms, and Amazon.
Griffin’s affection for the Invesco QQQ Trust possibly mirrors his affinity for the SPDR S&P 500 ETF Trust. Both ETFs offer a straightforward means to access a diversified basket of stocks. Noteworthy is the Invesco QQQ Trust’s outperformance, with Lipper designating it as the top large-cap growth fund based on total return over the past 15 years.
Long-Term Prospects of Griffin’s ETF Picks
The primary concern with both the SPDR S&P 500 ETF Trust and Invesco QQQ Trust is valuation, with the former boasting an average price-to-earnings ratio of 28.1 and the latter even higher at 37.7.
Nevertheless, for investors looking towards the horizon, these ETFs, laden with top-tier stocks, and a proactive rebalancing strategy, are poised to continue their winning streak over the next decade and beyond.
Quandary: Investing in the Invesco QQQ Trust?
Before plunging into investments in the Invesco QQQ Trust, it’s vital to ponder:
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