For investors holding the iShares Core S&P 500 ETF (IVV), the latest round of quarterly hedge fund filings reveals a figure worth watching.
Hedge funds collectively cut their IVV positions by roughly 63% during the second quarter of 2026, dropping from about 840 million shares to approximately 311 million, according to a Holdings Channel analysis of 13F filings reported by Nasdaq.com.
Roughly 1,650 institutional filers trimmed IVV positions during the second quarter, while 1,997 added shares, according to Quiver Quantitative’s tally of 13F filings.
The filings, which reflect positions held as of June 30, 2026, and were due by Aug. 14, 2026, arrived while IVV delivered strong year-to-date performance.
That split, a large rotation among institutional holders playing out against strong fund returns, raises questions for the broad base of investors who hold IVV.
IVV is still one of the market’s biggest and cheapest S&P 500 trackers
The sheer scale of the selling distinguishes this quarter from the routine institutional rebalancing that normally shows up in the 13F filing cycle each year.
Form 13F is a mandatory quarterly disclosure that every institutional investment manager with at least $100 million in qualifying assets must file with the SEC.
This quarter’s data captured a market environment where the S&P 500 was climbing steadily and IVV was posting mid-teens percentage returns year to date.
The fact that funds were reducing exposure to a product that was still delivering solid gains makes the sell-off harder to explain through conventional defensive repositioning logic.
IVV held approximately $888 billion in net assets and 1.18 billion shares outstanding at the second quarter’s close, according to BlackRock’s fund fact sheet.
The fund, which launched in 2000 and has a 0.03% annual expense ratio, earned Morningstar’s highest Gold Medalist Rating, awarded in April 2026.
Marshall Wace and Tudor bucked the IVV trend by adding billions in new shares
While the broad selling pattern dominated the quarterly filings, a handful of high-profile exceptions revealed that not every institutional manager agreed with the crowd.
London-based hedge fund Marshall Wace added roughly 13.5 million IVV shares during the second quarter, a purchase valued at approximately $10.1 billion that increased the firm’s position by about 51.5%, Quiver Quantitative’s tally of 13F disclosures showed.
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Paul Tudor Jones, the veteran macro trader and founder of Tudor Investment Corp, made a similarly aggressive move into the same fund, GuruFocus reported.
Tudor increased its IVV position by roughly 730%, adding about 1.4 million shares to bring total holdings to approximately 1.6 million shares. That stake was valued at roughly $1.21 billion and accounted for 1.71% of Tudor’s total second-quarter 13F portfolio.
Ken Griffin’s Citadel Advisors remained an active buyer of broad-market ETFs, with its portfolio reaching $874.94 billion, according to Holdings Channel. Its main S&P 500 exposure is held through SPDR’s SPY rather than iShares’ IVV during the quarter.
Envestnet Asset Management, Northwestern Mutual Wealth Management, Morgan Stanley, and Bank of America remained among IVV’s largest non-sponsor institutional holders, with combined positions in the tens of billions of dollars, MarketBeat’s tally of 13F filings found.
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S&P 500 concentration risk may be driving institutional rotation away from IVV
The selling pattern aligns with a growing institutional concern about how concentrated the S&P 500 has become in a handful of mega-cap stocks.
The top 10 holdings in the index account for roughly 37.5% of the fund’s assets, a historically elevated concentration level, Stockanalysis.com confirmed.
Hedge Fund Telemetry, a research service that tracks 13F filing data, described the second quarter as aggressive rotation rather than outright de-risking by funds.
Sophisticated managers recycled capital from prior winners into semiconductors, hyperscalers, infrastructure, and selective cyclical positions during the quarter, the research service observed.
Goldman Sachs Advisory Director David Kostin warned in a research report cited by Forbes that the historically elevated concentration in the S&P 500 has direct consequences for long-term index returns.
High concentration today portends much lower S&P 500 returns over the next decade than would have been the case in a less concentrated market.
Morgan Stanley’s investment management division flagged a related risk in its midyear hedge fund outlook, noting that positioning reversals triggered crowded unwinds across institutional portfolios.
Those shifts in artificial intelligence and technology holdings underscored the concentration risk now embedded in broader institutional portfolio construction, the firm warned.
What the IVV hedge fund pullback could signal for long-term holders
The contrast between broad hedge fund selling and concentrated mega-holder buying creates a split signal for individual investors holding IVV as a core position.
Morgan Stanley’s midyear outlook warned that sharp positioning reversals are becoming more frequent as AI-driven trades concentrate in fewer and fewer institutional hands.
An important caveat is that 13F filings are backward-looking snapshots, and they do not capture short positions or any trading that occurred after June 30, 2026. But even with that limitation, the ownership shift raises several open questions.
The concentration of IVV shares among fewer, larger holders has raised questions among market observers about whether the fund’s redemption mechanics would face pressure in a broad institutional drawdown.
The next filing cycle, due in November 2026, will show whether this quarter’s pullback was a one-off rebalancing or the beginning of a more structural shift away from broad S&P 500 exposure, Gibson Dunn showed.
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