The world’s biggest hedge funds are making some eyebrow-raising moves and they’re laser-obsessed with one thing: Big Tech. Based on the most recent 13F filings, institutional investors and hedge funds poured billions into big tech stocks such as Nvidia (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), Tesla (NASDAQ:TSLA) and Apple (NASDAQ:AAPL) during the last quarter. Even ETFs themselves, like the iShares Core S&P 500 ETF (NYSE:IVV), experienced big inflows of more than $21 billion.
So what does it all mean for average investors? Two things:
- The pros remain highly optimistic about tech.
- By investing in the right ETFs, individual investors can achieve similar exposure without the hedge fund-sized balance sheet.
Follow The Smart Money
While the headlines tend to flow to the likes of BlackRock, Vanguard or Millennium Management, individual investors have access to the same mega-cap tech surge through ETFs.
Here’s a rundown of some of those top stocks against recent fund inflows:
| Stock | Top Hedge Fund Buyers | Total Value Bought |
|---|---|---|
| Microsoft | Geode, Vanguard, BlackRock | $23.49B |
| Amazon | BlackRock, Vanguard, Arrowstreet | $17.75B |
| Apple | BlackRock, Geode, Vanguard | $15.77B |
| Nvidia | Vanguard, Geode, BlackRock | $14.91B |
| Alphabet | Vanguard, BlackRock, Geode | $12.97B |
| Meta Platforms | BlackRock, Viking Global | $12.17B |
| Tesla | Capstone Investment, Vanguard, BlackRock | $10.12B |
In the meantime, IVV, an S&P 500 exchange-traded fund, was one of the largest, gaining more than $21.36 billion with Capula Management and Millennium taking the lead.
ETFs That Follow The Hedge Fund Tech Bounce
Here are a few ETFs individual investors can look to access the same themes:
IVV, VOO, SPY – Timeless S&P 500 Exposure
Apart from IVV, the Vanguard S&P 500 ETF (NYSE:VOO) and the SPDR S&P 500 ETF (NYSE:SPY) are filled with the same big-name tech stocks that hedge funds adore. Microsoft, Apple, Nvidia, Amazon, Alphabet (NASDAQ:GOOGL), and Meta (NASDAQ:META) comprise the heaviest weightings. Notably, VOO has garnered $82 billion in inflows this year as of May 18, indicating strong demand.
QQQ, QQQM – Growth-Oriented & Technology-Laden
Following the Nasdaq-100, Invesco QQQ Trust (NASDAQ:QQQ) and Invesco NASDAQ 100 ETF (NASDAQ:QQQM) provide leveraged exposure to the largest names in tech, including the leaders of the AI revolution.
XLK, VGT – Technology-Sector Focused
Technology Select Sector SPDR Fund (NYSE:XLK) and Vanguard Information Technology ETF (NYSE:VGT). These sector-specific ETFs are best for those seeking a cleaner play in the space. XLK, for example, has more than 40% of its assets in MSFT and AAPL combined.
Why The Sprint?
A number of tailwinds are driving this hedge fund tech wave:
AI Arms Race: Hedge funds are wagering big that the AI revolution is only just beginning.
Earnings Resilience: Big Tech has shown remarkable stability and earnings growth amid rate hikes.
Cloud & Infrastructure Demand: Enterprise spending is ramping back up in areas dominated by Microsoft, Amazon and Alphabet.
Even ETFs like IVV, typically seen as broad-market plays, are riding this trend thanks to their tech-heavy weightings.
Hedge funds weren’t hoarding Big Tech with deep pockets, so retail investors don’t have to watch from the sidelines. One can create a diversified, tech-heavy portfolio with a few clicks using ETFs, and a lot less cash.
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