by George Smith, Portfolio Strategist, LPL Research
Additional content provided by Brian Booe, Associate Analyst, Research.
While Q3 may feel distant now, it marked a continuation of the U.S. equity rally that began in early April. Technology topped the sector leaderboard for the second consecutive quarter as strong earnings and artificial intelligence (AI) enthusiasm continued to drive gains for semiconductor and AI-related names. The Bloomberg U.S. Aggregate Index gained 2.0% in anticipation of Federal Reserve (Fed) rate cuts, while all domestic bond sectors traded higher. Against this backdrop, how did institutional investment managers respond?
13F filings may offer a unique window into how “smart money” is positioning portfolios. A “13F” is a form required by the Securities and Exchange Commission (SEC) for institutional investment managers who oversee at least $100 million in assets under management (AUM) to be submitted within 45 days of each quarter end. The report, which details each manager’s equity positions, was created to help provide transparency for the marketplace into institutional investors’ investment strategies. The reports are also commonly used to provide insights into how hedge funds, pension funds, endowments, and private equity firms, for example, are navigating the market. Additional types of funds that are required to file include venture capital firms, banks, traditional corporations, insurance companies, and brokerage firms.
LPL Research presents key takeaways from the latest data.
Technology Continues to Lead the Charge
Microsoft (MSFT) and NVIDIA (NVDA) were among the biggest winners, with NVIDIA seeing a staggering $348 billion increase in institutional holdings. Microsoft followed closely, gaining $112 billion in market value held. Institutional owners hold more than $2 trillion of each of these companies.
Technology and Communication Services Saw the Biggest Institutional Buys in Q3
Source: LPL Research, Bloomberg 11/19/25
Renewed Interest in Energy and Financials
On a relative basis, energy names surged with significant inflows, while major financial institutions also saw billions in added market value. These moves suggest investors are balancing tech exposure with sectors that benefit from higher rates and global energy demand.
Hedge Funds Lean Into Crypto and AI
Hedge fund filings have revealed aggressive bets on digital assets and AI infrastructure. A large increase in cryptocurrency-related products and blockchain mining firms underscores the growing institutional appetite for digital assets. On the AI front, software and data analytics companies, including Palantir (PLTR) and AppLovin (APP) were standout additions.
Big Reductions in Broad-Market ETFs and Consumer Names
On the flip side, broad-market ETFs saw the largest reductions, shedding tens of billions in market value. Streaming and consumer discretionary names also faced heavy selling as investors reassessed valuations amid rising competition.
Berkshire’s Moves Signal Long-Term Themes
In news that made headlines and lifted sentiment for the stock, Warren Buffett’s team added 17 million shares of Alphabet (GOOGL) as a new position (a portion of the overall increase of almost 30 million shares held by institutional holders). This was an important statement purchase as it potentially demonstrates confidence in AI-driven growth (at least at Google) and may signal a shift toward higher-growth technology exposure within Berkshire’s portfolio. Berkshire also increased stakes in Sirius XM (SIRI) and Chubb (CB), while trimming Apple (AAPL) by 41.8 million shares.
Why It Matters for Investors
13F filings don’t predict the future, but they do highlight where institutional conviction lies. The continued move into tech suggests AI and the cloud remain core growth drivers, while renewed interest in energy and financials reflects a hedge against inflation and rate volatility. Hedge funds’ crypto bets signal that digital assets are moving further into mainstream portfolios (even if in hindsight this was a challenging timing for this investment). For individual investors, these trends can inform sector allocation decisions and help identify areas of potential opportunity — or risk of crowded trades — over the next several quarters.
Tactical Positioning
Unlike hedge funds that only disclose their positions 45 days after quarter end, LPL Research’s Strategic and Tactical Asset Allocation Committee (STAAC) is happy to keep our advisors and their clients informed of our views on an ongoing and up-to-date basis. The STAAC has positioned our Tactical Asset Allocation (TAA) and tactical model portfolios to remain fully invested, targeting benchmark weight allocation to equities. We prefer large caps over small caps and favor growth over value, and the Committee recommends well diversified regional exposures, with benchmark-level allocations to the U.S., developed international, and emerging markets.
Within fixed income, STAAC holds a neutral weight in core bonds, with a slight preference for mortgage-backed securities (MBS) over investment-grade corporates. The Committee believes the risk-reward for core bond sectors (U.S. Treasury, agency MBS, investment-grade corporates) is more attractive than plus sectors. STAAC regularly convenes for discussion and analysis on entry points and opportunities, however elusive they’ve been.
The information presented is for educational and informational purposes only and is not intended as a recommendation or specific advice. Cryptocurrency and cryptocurrency-related products can be volatile, are highly speculative and involve significant risks including: liquidity, pricing, regulatory, cybersecurity risk, and loss of principal. A cryptocurrency fund may trade at a significant premium to Net Asset Value (NAV). Cryptocurrencies are not legal tender and are not government backed. Cryptocurrencies are non-traditional investments, resulting in a different tax treatment than currency. Federal, state or foreign governments may restrict the use and exchange of cryptocurrency. The use and exchange of cryptocurrency may also be restricted or halted permanently as regulatory developments continue, and regulations are subject to change at any time. Cryptocurrency exchanges may stop operating or permanently shut down due to fraud, technical glitches, hackers, malware, or bankruptcy.
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