Morgan Stanley Trims Portfolio by 2.1% in Q1 2025, Shifts to Defensive Stocks

Morgan Stanley has made significant adjustments to its portfolio in the first quarter of 2025, as revealed in its 13F filing with the U.S. Securities and Exchange Commission. The total market value of its holdings decreased by 2.1% to $1.4 trillion, down from $1.43 trillion in the previous quarter. The firm added 444 new stocks to its portfolio, increased its holdings in 3,493 stocks, reduced its holdings in 3,410 stocks, and completely exited 323 stocks. The top ten holdings accounted for 19.97% of the total portfolio value.

Among the top five holdings, Apple (AAPL.US) remained the largest, with 241 million shares valued at approximately $535.8 billion, representing 3.83% of the portfolio. This is an increase of 1.24% from the previous quarter. Microsoft (MSFT.US) followed with 124 million shares valued at $464.9 billion, making up 3.32% of the portfolio, a decrease of 1.32% from the previous quarter. NVIDIA (NVDA.US) ranked third with 344 million shares valued at $373 billion, accounting for 2.67% of the portfolio, a decrease of 1.57% from the previous quarter. Amazon (AMZN.US) was fourth with 167 million shares valued at $316.8 billion, representing 2.27% of the portfolio, a decrease of 0.38% from the previous quarter. Meta (META.US) was fifth with 37.89 million shares valued at $218.4 billion, making up 1.56% of the portfolio, an increase of 4.89% from the previous quarter.

In terms of changes in holdings, the top five stocks that Morgan Stanley increased its holdings in were AbbVie (ABBV.US), Johnson & Johnson (JNJ.US), Eli Lilly (LLY.US), ExxonMobil (XOM.US), and Amgen (AMGN.US). These companies are primarily in the pharmaceutical and healthcare sectors, indicating a shift towards defensive stocks. On the other hand, the top five stocks that Morgan Stanley reduced its holdings in were NVIDIA, Microsoft, Amazon, TradeDesk (TTD.US), and ServiceNow (NOW.US). This reduction in technology stocks suggests a strategic move away from high-growth, high-risk sectors.

The shift in Morgan Stanley's portfolio reflects a broader trend in the investment community, where investors are increasingly seeking stability and defensive positions in the face of economic uncertainty. The move towards pharmaceutical and healthcare stocks, which are generally less volatile and more resilient during economic downturns, aligns with this defensive strategy. Conversely, the reduction in technology stocks, which have been a significant driver of market growth in recent years, indicates a cautious approach to sectors that may be more susceptible to market fluctuations.

This strategic realignment by Morgan Stanley underscores the importance of diversification and risk management in investment portfolios. By increasing holdings in defensive sectors and reducing exposure to high-risk areas, the firm is positioning itself to weather potential economic storms while still maintaining growth potential. This approach not only protects against downside risk but also ensures that the portfolio remains balanced and resilient in the face of changing market conditions.