Institutional ETF Rebalancing
NewEdge Advisors Trims Stakes in Cloud, Industrials, Mid-Cap ETFs
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Key Points
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In addition to NewEdge’s SKYY sale, several other hedge funds opened new SKYY positions in Q1 with notable value: Independent Financial Group LLC (~$5.0M), Evelyn Partners Investment Management Europe Ltd (~$5.5M), Hyposwiss Advisors SA (~$2.5M), San Luis Wealth Advisors LLC (~$0.8M), and Osbon Capital Management LLC (~$1.1M).
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The SKYY ETF tracks the ISE Cloud Computing index and uses a modified-equally-weighted approach with a 4.5% cap, and it has been in operation since its launch on July 5, 2011.
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Bank of America Corp DE boosted its stake in Fidelity MSCI Industrials Index ETF (FIDU) by 13.6% in Q1, now holding 142,307 shares worth about $12.31 million.
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In SPDR Portfolio S&P 400 Mid Cap ETF (SPMD), CarsonAllaria Wealth Management Ltd. raised its stake to 96,472 shares and Fifth Third Bancorp increased to 283,790 shares; hedge funds collectively own roughly 61.70% of SPMD.
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Westshore Wealth LLC trimmed its AllianzIM U.S. Large Cap Buffer20 Aug ETF (AUGW) stake by 30.3% in Q1, reducing to 33,794 shares.
NewEdge Advisors LLC slashed its positions in three major ETFs during the first quarter of 2026, with cuts ranging from 43% to nearly 74%. The New Orleans-based wealth manager, which oversees about $27.7 billion in assets, sold down its stakes in the First Trust Cloud Computing ETF (SKYY), the Fidelity MSCI Industrials Index ETF (FIDU), and the SPDR Portfolio S&P 400 Mid Cap ETF (SPMD), according to SEC filings submitted in May 2026.
The moves reflect a broader wave of institutional rebalancing sweeping the U.S. ETF market. Even as NewEdge trimmed, other major players — including Bank of America and Independent Financial Group — moved in the opposite direction, snapping up shares in the same funds.
NewEdge Cuts SKYY, FIDU, and SPMD by Double Digits
NewEdge cut its SKYY stake by 43.4%, ending Q1 with 19,496 shares worth about $2.13 million. Its FIDU position dropped even more sharply — down 57.8% after selling 50,132 shares, leaving it with 36,587 shares valued at roughly $3.17 million. The deepest cut came in SPMD, where NewEdge sold 134,764 shares, reducing its position by 73.6% to just 48,298 shares worth about $2.86 million, according to Ticker Report.
SKYY tracks the ISE Cloud Computing Index using a modified equal-weighted approach with a 4.5% cap per holding. It has traded since July 5, 2011. The equal-weight structure means NewEdge's selling spread risk across dozens of cloud stocks rather than hammering a few large names.
Contrarian Buyers Rush Into the Same ETFs NewEdge Fled
While NewEdge was selling SKYY, at least five other firms opened brand-new positions in the cloud ETF during Q1. Independent Financial Group LLC bought 45,745 shares worth about $5.0 million. Evelyn Partners Investment Management Europe Ltd. established a stake worth roughly $5.5 million. Hyposwiss Advisors SA added about $2.5 million, and Osbon Capital Management LLC picked up 8,133 shares worth $1.1 million.
The FIDU and SPMD funds saw similar counter-moves. Bank of America Corp DE boosted its FIDU stake by 13.6%, adding 16,992 shares to reach 142,307 shares valued at $12.31 million. In SPMD, Fifth Third Bancorp grew its position to 283,790 shares and CarsonAllaria Wealth Management raised its stake to over 96,000 shares. Institutional investors now collectively own about 61.7% of SPMD's float, according to Ticker Report.
Profit-Taking or Panic? Two Very Different Market Theses
NewEdge's Chief Investment Officer Cameron Dawson has publicly backed aggressive rebalancing in 2026, arguing that "trimming winners and managing volatility through structured rebalancing is exactly the right response to market dispersion." That framing positions the cuts as disciplined risk management — not a bearish retreat from tech or industrials.
The buyers see it differently. Firms like Independent Financial Group and Evelyn Partners appear to be betting that the Q1 dip in cloud stocks is a long-term entry point. Bank of America's simultaneous accumulation of FIDU — the same industrial ETF NewEdge dumped — suggests the two sides hold starkly different views on where the U.S. economy heads from here.
Westshore Trims Buffer ETF as Risk Appetite Shifts
NewEdge was not the only firm pulling back in Q1. Westshore Wealth LLC cut its stake in the AllianzIM U.S. Large Cap Buffer20 Aug ETF (AUGW) by 30.3%, selling 14,685 shares and ending the quarter with 33,794 shares, according to Ticker Report. Buffer ETFs are designed to limit losses but also cap gains — making them less attractive when investors expect markets to recover strongly.
NewEdge itself also trimmed several other positions in Q1. It sold 68,244 shares of the Invesco S&P 500 Equal Weight Utilities ETF (RSPU), cutting that stake by 74.1%. It also reduced its SPDR Bloomberg Emerging Markets USD Bond ETF (EMHC) position by 20.9%, selling 24,721 shares. The pattern points to a firm-wide effort to reduce exposure across multiple asset classes simultaneously, per Ticker Report.
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