Bridgewater Associates is the world’s biggest hedge fund. Founded in 1975 by Ray Dalio 1, it grew exponentially throughout the decades, and it now serves individuals, institutions, trusts, private funds, charitable organizations, and investment companies offering portfolio management and advisory services to its clients from around the globe. 2 During the Q3 2020 period, Bridgewater took several bold moves in its portfolio, which had a total of 430 holdings. 3 Diversification is key to Ray Dalio’s investment strategy, hence there were various moves in stocks bought and sold during the Q3 2020.
During Q3 2020, Bridgewater substantially increased its exposure on Chinese Equity, above all Alibaba, the Chinese multinational specializing in e-commerce, retail, Internet and technology. The hedge fund increased its number of shares by 40.34% during Q3, according to 13F SEC filings. The value of this position increased from 205m$ to 392m$. Excluding ETFs, Alibaba has the highest equity weight in the portfolio.
Bridgewater has also increased its positions in NIO Inc which is known as the “Chinese Tesla”, designer and developer of smart, high-performance electric vehicles. According to SEC filings in Q2 2020, Bridgewater had 856,026 shares in NIO that were worth $6.6 million. In Q3, Bridgewater increased its position by 83% purchasing an additional 713,430 NIO shares, bringing its total shares of NIO to 1,569,456, with a market value of $33.3 million. 4 During the second half of 2020 NIO shares have grown by 526% with the price per share going from 7.72$ to 48.38$.
| Stock | Company Name | % of Portfolio | Shares | Value | % Change | Change |
|---|---|---|---|---|---|---|
| BABA | Alibaba Group Hldg Ltd | 4.72% | 1.34M | $392.19M | +40,34% | +538.17K |
| NIO | Nio Inc | 0.40% | 1.569M | $33.30M | +83.34% | +713.43K |
Figure 1: Increases in portfolio of Bridgewater 5
Among the biggest stocks that got sold during the Q3 were SPDR S&P 500 Trust (SPY) and iShares Core S&P 500 exchange-traded funds (IVV). Bridgewater sold 63.08% of its iShares Core S&P 500 stocks and 21.33% of its SPRD S&P 500 stocks. The reduction meant that Ray Dalio is no longer betting on the American Top 500 companies anymore, at least not so much as he did before. Even with the reduction, SPY still makes the largest stock in Bridgewater portfolio accounting for 16% of the company’s current investments.
| Stock | Company Name | % of Portfolio | Shares | Value | % Change | Change |
|---|---|---|---|---|---|---|
| FXI | Ishares China Large Cap Etf | 1.86% | 3.69M | $154.87M | -22.81 % | -1.09M |
| SPY | Spdr S&P 500 | 15.99% | 3.97M | $1.33B | -21.33 % | -1.08M |
| IVV | Ishares Core S&P 500 Etf | 2.49% | 615.28K | $206.77M | -63.08% | -1.05M |
Figure 2:Reduction in portfolio of Bridgewater 6
While reducing the portfolio in Exchange Trade Fund (ETF), Bridgewater increased its shares on consumer staples. Specifically, this includes Walmart and P&G. Walmart was the biggest single purchase for this quarter, where Bridgewater bought 1.39 million stocks and 1.23 million stocks of PG. These are new stocks in his portfolio.
| Stock | Company Name | % of Portfolio | Shares | Value | % Change | Change |
|---|---|---|---|---|---|---|
| WMT | Walmart Stores Inc | 2.35% | 1.39M | $195.06M | NEW | 1.39M |
| PG | Procter and Gamble Co | 2.05% | 1.23M | $170.322M | NEW | 1.23M |
Figure 3: Increases in portfolio of Bridgewater 7
N.B. This article is not intended to provide any professional investment advice and should be treated as more of an opinion piece.
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1 Ray Dalio. (2021, January 14). Retrieved from https://www.forbes.com/profile/ray-dalio/?sh=6b154864663a
2 Bridgewater Associates LP. (n.d.). Retrieved from https://www.bloomberg.com/profile/company/20273Z:US
3 Form 13F-HR Bridgewater Associates, Lp. (2020, November 13). Retrieved from https://sec.report/Document/0001567619-20-019382
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