Harvard reduced its stock holdings by 35 percent during the first quarter of 2010, even as the Dow Jones Industrial Average rose about 4 percent over the same period.

According to a Securities and Exchange Commission filing released Friday, Harvard had nearly $1.78 billion in U.S. stocks and exchange-traded index funds (ETFs), compared with $2.26 billion in the previous quarter. The decline leaves the value of the University’s stock holdings at about September 2009 levels.

Harvard’s 13-F filing last quarter indicated that the University had returned to the stock market after selling off large portions of its stock holdings during last year’s recession, but this latest filing shows that Harvard money managers have reduced their exposure to the stock market in the quarter ending March 31.

Friday’s filing only includes stocks traded on U.S. exchanges and owned directly by Harvard Management Company. It does not include investments managed by outside money managers, who invest about two-thirds of the University endowment.

But the filing does provide a glimpse into the University’s investment strategy, as Harvard’s stock portfolio continued to be centered around emerging markets, which comprise about 75 percent of the University’s stock holdings.

As seen in past filings, about 65 percent of University stock holdings are in a basket of 12 emerging market index funds—which track the performance of foreign markets such as Brazil, India, and Mexico, but are traded on domestic exchanges—though the amount held in these ETFs declined over the past quarter.

The University slightly reduced its holdings in these funds over the past quarter as part of its broader move to decrease stock market investments and gave up its holdings in several other national market funds, including those from Hong Kong and Turkey.

Among its holdings in U.S. companies, the University appeared to have moved away from certain sectors, in particular the financial sector. HMC sold its $35 million holding in Bank of America and its smaller investment in Citigroup.

While HMC appears to have largely sold off stock holdings during the past quarter, it acquired a $30 million stake in Brinks Home Security, which recently merged with another security company.

Last quarter, the University had invested in two stocks familiar to its student body—the fast food chain Chipotle and comics giant Marvel Entertainment—but those investments did not appear in yesterday’s filings.

—Staff writer Elias J. Groll can be reached at egroll@fas.harvard.edu.

—Staff writer William N. White can be reached at wwhite@fas.harvard.edu.