Billionaire Ken Griffin's Biggest Bet: S&P 500 ETF Trust

Ruling out the 'Magnificent Seven' and more

Citadel's portfolio includes thousands of stocks. Name a stock, and there's a pretty good chance Griffin has at least a small position in it.

Several so-called 'Magnificent Seven' stocks have been huge winners in 2023 and 2024. Griffin owns all of them. Four of them rank among Citadel's top 10 holdings: Nvidia, Microsoft, Amazon, and Meta Platforms.

What about Nvidia's biggest rival -- Advanced Micro Devices? Griffin's stake in AMD totaled $885 million at the end of 2023, enough to make it Citadel's fifth-largest position.

However, *none* of these stocks is Griffin's biggest holding. But they're part of it.

Griffin's biggest bet

I won't build the suspense any further. Griffin's biggest bet is on... the SPDR S&P 500 ETF Trust (NYSEMKT: SPY). That's right, his hedge fund is invested more heavily in a relatively safe S&P 500 index exchange-traded fund (ETF) than in any individual stock.

As of the end of 2023, Citadel owned 5.52 million shares of SPY worth $2.63 billion. This stake comprised 2.64% of the hedge fund's total portfolio, well ahead of the 1.81% for Nvidia.

*Imagine* Dale Earnhardt Jr. choosing a Kia Soul as a personal vehicle. Or perhaps Chef Gordon Ramsay picking boiled potatoes as his favorite dish. There's nothing wrong with a Kia Soul or boiled potatoes, but you'd expect something more exciting from these celebrities. Similarly, I suspect most of us would have thought Griffin's top holding would be almost anything but an index ETF.

I spy an even better pick

Is the SPDR S&P 500 ETF Trust a good choice for investors who aren't billionaires? I think so. However, I spy (pun fully intended) an even better pick: the Vanguard S&P 500 ETF (NYSEMKT: VOO).

Both ETFs attempt to track the performance of the S&P 500 index. Buying and holding either fund will likely pay off handsomely over the long run. The main reason I like VOO better than SPY, though, is the cost. The Vanguard ETF's annual expense ratio is 0.03% compared to 0.0945% for SPY.

VOO gets a stamp of approval from both Griffin and Buffett too. The ETF is in Citadel's and Berkshire Hathaway's portfolios. Buffett even suggested that the trustee managing his family's inheritance use a Vanguard S&P 500 index fund.

Should you invest $1,000 in SPDR S&P 500 ETF Trust right now?

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