S3 Partners data show Passive Longs, Active Longs & Active Shorts increased their overall exposure in 2025.
Reported Passive Long exposure (ETF providers, passive mutual funds, pension funds, etc.) increased by $10.9 trillion, +25%, to $55.2 trillion.
Reported Active Long exposure (hedge funds, active mutual funds, etc.) increased by $2.7 trillion, +19%. to $17.1 trillion and Active Short exposure increased by $537 billion, +34%, to $2.1 trillion.
Both Passive & Active investors increased both their long and short positions significantly into a rising market in 2025.
Reported Passive Long holdings of mutual funds, pension funds and ETF investors increased by $10.9 trillion in 2025.
The largest dollar increases were in the Industrials (which was up +17% for the year); Communication Services (which was up +26% for the year) and Information Technology (which was up +21% for the year) sectors.
While the Materials (which were up +10% for the year) and Real Estate (which was down -1% for the year) sectors saw a decrease in long holdings.
Active Long investors, hedge funds, were not standing on the sidelines and added $2.7 trillion in long exposure. The Health Care sector saw the largest increase, followed by the Information Technology sector.
On the short side of the market, Active Shorts (predominately made up of hedge funds) boosted their exposure by $537 billion. The Information Technology sector saw the largest increase followed by Financial Securities (ETFs).
Both Active & Passive investors increased their holdings looking to benefit from a market that rallied strongly after its first quarter weakness and are holding on to that exposure hoping for a strong 2026.
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The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC (“S3 Partners”) to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks, and merits, as well as the legal, tax, accounting, and investment consequences, of such decisions.
