Last month, Wellington — Citadel’s multi-strategy flagship fund — rose by 7.5%, bringing its total year-to-date (YTD) returns to nearly 13%. Meanwhile, the S&P 500 lost 8.8% in April according to CNBC, putting its YTD returns at a loss of 13.7% at the end of the month.
Citadel founder and CEO Ken Griffin seems to thrive in times of volatility, however. The veteran hedge fund manager explained:
“It’s been an environment where we believe that owning stock outright long is likely to be a punishing experience. Having said that, there has […] been just incredible moves […] If you’re on the right side of those moves, or you’re quick to react to information, you can nimbly generate trading revenues in an environment like this.”
What exactly is Ken Griffin invested in right now? Let’s dive in.
What Is Ken Griffin Betting On?
Citadel is a multi-billion dollar hedge fund with a long-term orientation. The fund holds stocks in its portfolio for 16.7 quarters on average, or just over four years. Citadel owns thousands of stocks and acquired 1,689 new positions during the first quarter. It also sold out of 1,962 positions in Q1. Still, the fund is relatively concentrated in its top 10 positions, considering it owns thousands of companies. Citadel carries a top 10 portfolio concentration of 31.76%.
True to his word, none of Griffin’s top 10 positions are outright longs. In fact, the top 67 positions of Citadel are all options.
This fund’s largest position is put options on the SPDR S&P 500 ETF. Citadel owns put options against 74.38 million shares of SPY. During Q1, Griffin purchased more put options against 3.7 million shares, increasing his existing position by 5%. SPY put options make up 6.93% of the portfolio.
Citadel’s second largest-position is calls on Tesla. The fund owns calls options against 21.92 million shares of TSLA stock. TSLA calls make up 4.88% of the portfolio.
However, Citadel’s third-largest position is puts against Tesla. These put options are held against 17.29 million shares worth 3.85% of the portfolio. During Q1, Griffin reduced his Tesla call position by 7% and reduced his Tesla put option position by 17%
Like his Tesla position, Griffin also owns both call and put options against SPY. Citadel’s fourth-largest position is calls against SPY, making up 2.82% of its portfolio. The fund owns call options against 30.26 million shares of the ETF.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
