Ken Griffin ranks among the greatest hedge fund managers of all time. His net worth of $36.7 billion -- built largely through Griffin's hedge fund, Citadel -- is one of the biggest proofs behind that claim.

Much of Griffin's tremendous success has resulted from his out-of-the-box thinking. So what's the billionaire investor's biggest holding right now? You might be surprised.

Ruling out the "Magnificent Seven" and more

Citadel's portfolio includes thousands of stocks. Name a stock, and there's a pretty good chance Griffin has at least a small position in it.

Several so-called "Magnificent Seven" stocks have been huge winners in 2023 and 2024. Griffin owns all of them. Four of them rank among Citadel's top 10 holdings: Nvidia, Microsoft, Amazon, and Meta Platforms.

What about Nvidia's biggest rival -- Advanced Micro Devices? Griffin's stake in AMD totaled $885 million at the end of 2023, enough to make it Citadel's fifth-largest position.

However, none of these stocks is Griffin's biggest holding. But they're part of it.

Griffin's biggest bet

I won't build the suspense any further. Griffin's biggest bet is on... the SPDR S&P 500 ETF Trust (SPY 0.08%). That's right, his hedge fund is invested more heavily in a relatively safe S&P 500 index exchange-traded fund (ETF) than in any individual stock.

As of the end of 2023, Citadel owned 5.52 million shares of SPY worth $2.63 billion. This stake comprised 2.64% of the hedge fund's total portfolio, well ahead of the 1.81% for Nvidia.

Imagine Dale Earnhardt Jr. choosing a Kia Soul as a personal vehicle. Or perhaps Chef Gordon Ramsay picking boiled potatoes as his favorite dish. There's nothing wrong with a Kia Soul or boiled potatoes, but you'd expect something more exciting from these celebrities. Similarly, I suspect most of us would have thought Griffin's top holding would be almost anything but an index ETF.

So why is SPY Citadel's biggest holding? Maybe because its record of delivering solid returns over the long term is good. The ETF also provides a convenient way to own stakes in the 500 largest companies in the U.S.

Griffin isn't the only billionaire who likes S&P 500 index funds, by the way. Warren Buffett revealed years ago his will recommends much of the cash his family receives as an inheritance be invested in an S&P 500 index fund. Buffett's Berkshire Hathaway investment portfolio includes SPY.

I spy an even better pick

Is the SPDR S&P 500 ETF Trust a good choice for investors who aren't billionaires? I think so. However, I spy (pun fully intended) an even better pick: the Vanguard S&P 500 ETF (VOO 0.07%).

Both ETFs attempt to track the performance of the S&P 500 index. Buying and holding either fund will likely pay off handsomely over the long run. The main reason I like VOO better than SPY, though, is the cost. The Vanguard ETF's annual expense ratio is 0.03% compared to 0.0945% for SPY. Granted, this is a minuscule difference. But why pay more when you don't have to?

VOO gets a stamp of approval from both Griffin and Buffett too. The ETF is in Citadel's and Berkshire Hathaway's portfolios. Buffett even suggested that the trustee managing his family's inheritance use a Vanguard S&P 500 index fund.