AI Analysis · Q1 2026

Passaic Partners' Q1 2026 filing is a $1.07B, 15-position core-satellite portfolio made up almost entirely of iShares and SPDR ETFs — and the quarter's story is not a bold sector bet but a deliberate fixed-income and factor de-risking. The fund cut its large-cap US equity anchor SPY ($316.1M, 29.6% of AUM) by $21.1M (-1.7% shares), its developed-markets equity core EFA ($182.1M, 17.0%) by $17.4M (-9.7%), its emerging-markets equity IEMG ($78.3M, 7.3%) by $41.0M (-36.7%), its international-ETF IEFA ($184.4M, 17.2%) by $17.4M (-9.7%), its TIPS inflation hedge TIP ($17.2M, 1.6%) by $22.8M (-57.2%), and its homebuilders ETF XHB ($8.7M, 0.8%) by $21.0M (-69.5%). The offset was three new opens: EFA (developed markets, $182.1M — reclassified from an update of a prior position, but the iShares filing-treatment records it as a NEW position given the CUSIP-level data here), EEM (emerging markets, $60.9M), and AGG (US aggregate bonds, $34.4M), plus a modest increase in XLU (utilities, $17.2M vs $19.9M previous — actually decreased, but the opening of IYR (real estate, $17.3M) introduces a new sector tilt). The sector breakdown is ETF-only — 99.2% in ETFs, 0.8% in commodities (Invesco DBA) — so the analysis is purely about the ETF sleeve construction, not single-name stock selection. The key observation is the simultaneous cuts to EFA, EEM, IEFA, and IEMG (all international equity sleeves) while maintaining or adding US equity (SPY was modestly reduced but remains the largest position at 29.6%) and opening AGG (US aggregate bonds). That pattern reads as a manager reducing international equity factor exposure and adding domestic fixed income — a tactical move into duration and away from developed + emerging market equity risk that is consistent with a macro view that US rates are peaking and that international equities face headwinds from a stronger dollar and slower ex-US growth.

The equity side tells a clear international-reduction story. EFA (iShares Developed Markets, $182.1M, 17.0%) was reduced by $17.4M and 632,636 shares (-9.7%) — a developed-markets ex-US core position that the manager is trimming in favor of domestic exposure. IEFA (iShares Core MSCI EAFE, $184.4M, 17.2%) was cut by $17.4M and 219,336 shares (-9.7%) — the same thesis, different vehicle. IEMG (iShares Core MSCI Emerging Markets, $78.3M, 7.3%) was reduced more aggressively: $41.0M and 651,746 shares (-36.7%), the largest percentage cut in the filing. EEM (iShares MSCI Emerging Markets, $60.9M, 5.7%) opened as a new position at $60.9M — a different emerging-markets vehicle with a different index methodology, suggesting the manager wants to maintain some EM exposure but switched the sleeve vehicle. The SPY cut ($21.1M, -1.7% shares) kept the US large-cap anchor at $316.1M and 29.6% of AUM — still the portfolio's ballast but slightly trimmed. IVV (iShares Core S&P 500, $67.6M, 6.3%) was reduced only $4.8M and 2,287 shares (-2.2%) — a much smaller cut than the international names, consistent with a view that US equities are preferred.

The fixed-income and real-asset side shows the matching offset. AGG (iShares Core U.S. Aggregate Bond ETF, $34.4M, 3.2%) opened as a new position — a broad investment-grade US bond ETF that provides duration and credit exposure in a single wrapper. TIP ($17.2M, 1.6%) was heavily reduced by $22.8M and 208,232 shares (-57.2%) — a TIPS inflation-hedge sleeve that suggests the manager is less concerned about near-term inflation persistence than they were in Q4 2025. XHB (SPDR Homebuilders, $8.7M, 0.8%) was cut by $21.0M and 200,334 shares (-69.5%) — a cyclical US housing play that the manager is unwinding, consistent with a view that housing-driven inflation is fading. IYR (iShares US Real Estate, $17.3M, 1.6%) opened as a new position, introducing commercial real estate exposure through REITs — an asset class that rallies when rates fall, which pairs with the AGG duration add and the TIP reduction. DBA (Invesco DB Commodity, $8.7M, 0.8%) was essentially unchanged (+$0.9M, +3.2% shares) — the sole non-ETF position and a modest commodity futures play that the manager is maintaining as an inflation/geopolitical hedge.

Quarter at a glance — Q1 2026

Top 10 holdings

Filing history