Ken Griffin Boosts Citadel's Investment in a Leading S&P 500 ETF

Ken Griffin's Citadel Advisors has significantly increased its investment in a popular S&P 500-themed ETF.

Every quarter, institutional investors managing at least $100 million are required to submit a 13F filing to the Securities and Exchange Commission (SEC). These filings provide a detailed snapshot of the stocks that hedge fund managers buy and sell during the quarter, which helps to reveal the stocks that Wall Street's "smart money" is gravitating towards.

Take Ken Griffin as a key example. The billionaire CEO of Citadel Advisors is known for being one of the most accomplished money managers in the industry. It's reasonable to assume that Griffin and his team have a talent for identifying optimal investment opportunities.

In a remarkable move during the third quarter, Citadel increased its stake in the Vanguard S&P 500 ETF (VOO) by a staggering 277%, acquiring an additional 398,000 shares. This action highlights that even some of the most reputable investors are finding value in the S&P 500.

Let's explore why this decision by Griffin is a smart move and why the Vanguard S&P 500 ETF can be a wise choice for individual investors looking for long-term growth.

Why is the Vanguard S&P 500 ETF so appealing?

First and foremost, it's important to note that Citadel Advisors manages over $95 billion in assets across more than 5,700 positions. While having a stake in the Vanguard S&P 500 ETF is interesting, it only represents about 0.30% of the overall Citadel portfolio.

However, an important takeaway here is that Citadel is diversifying its investment strategy by adding exposure to a broader market. This helps to decrease the risk associated with more volatile stock picks.

One possible reason Griffin has shown interest in the Vanguard S&P 500 ETF is its investment approach. The ETF is weighted based on market capitalization, meaning larger companies like Apple, Microsoft, Nvidia, and Eli Lilly will have a greater influence on the ETF's performance compared to smaller stocks. These larger companies tend to have a growth-oriented focus, and the ETF offers a diverse range of investments across various industries.

Performance of the Vanguard S&P 500 ETF Over Time

The Vanguard S&P 500 ETF has consistently outperformed many of its peers in the S&P 500 index fund space over the long run. Its total returns have placed it at the forefront among similar funds.

Although the Vanguard S&P 500 ETF competes closely with the SPDR S&P 500 ETF Trust, it has managed to slightly outpace it. This is mainly due to its lower expense ratio of just 0.03%, compared to 0.0945% for the SPDR fund, making the Vanguard ETF a cost-effective option for investors.

Why the Vanguard S&P 500 ETF is a Smart Investment Choice

Looking at the cost of investment is only part of the equation; the broader market outlook also plays a critical role. With signals pointing to a potentially fruitful year in 2025, it is essential not to become overly focused on short-term specifics. Historically, the stock market proves to be a resilient vehicle that generally trends upward in the long run.

The Vanguard S&P 500 ETF has generated impressive returns over the last decade despite several market challenges, such as the steep declines seen in 2020 during the COVID-19 pandemic and the volatility in 2022 amid soaring inflation and rising interest rates.

Despite these hurdles, both the S&P 500 and corresponding funds have continued to gain. For investors with a long-term horizon, the Vanguard S&P 500 ETF represents a straightforward investment opportunity. It allows for passive exposure to the overall market while balancing individual stock investments.

investment, ETF, S&P500