GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

World's Largest Hedge Fund Bridgewater - A Tale of Five ETFs

May 10, 2013 | About:
Sally Jones

Sally Jones

49 followers
Like a true Guru, mega-investor Raymond Dalio is reportedly a meditator. The practice of quieting the mind has helped make his firm Bridgewater Associates the largest hedge fund in the world with around $150 billion under management. The legend goes that Dalio began trading when he was 12 years old and tripled his $300 investment. Since that time, he’s appeared on numerous lists of the world’s richest and most influential people. Most recently, Dalio was ranked No. 2 on the 2012 Rich List of Institutional Investor’s Alpha. Dalio is reported to have earned $1.7 billion in 2012. According to Forbes, Dalio is the 44th richest person in America and the 88th richest person in the world. As of March 2012, Ray Dalio had a reported net worth of $12.5 billion. How does he do it? On the portfolio side, it is primarily through ETFs.

Here’s a look at the top five holdings of Ray Dalio, who carries the weighty moniker of, “the Steve Jobs of investing.” Dalio’s top five tell a tale of ETFs and patience. He buys large and makes modest but steady gains, according to his trading history. In fact, the Bridgewater portfolio is heavily weighted with ETF at 88.2%.

No. 1: Vanguard MSCI Emerging Markets ETF (VWO), Weighting: 30.6%, Shares Owned: 67,375,545, Value: $3 billion

Ray Dalio’s top holding is Vanguard MSCI Emerging Markets ETF (VWO) with 4.99% of shares outstanding. His $3 billion dollar stake of over 67 million shares can be traced back to the fourth quarter of 2009 when he first bought around 1.5 million shares at an average price of $40.3 for a 10.7% gain. Since that time, Dalio’s average cost on over 67 million shares is $42 per share with a 6% gain. This holding’s highest gain for Dalio was 12.9% in the fourth quarter of 2011.

Up 9% over 12 months, Vanguard MSCI Emerging Markets ETF has a market cap of $57.76 billion; its shares were traded at around $44.61. The dividend yield of Vanguard MSCI Emerging Markets ETF stocks is 3.20%.

1368142779643.png

VWO data by GuruFocus.com

No. 2: SPDR S&P 500 ETF (SPY), Weighting: 29.5%, Shares Owned: 20,302,100, Value: $2.8 billion

Ray Dalio’s No. 2 top holding is Standard and Poor's Depository Receipts, or SPDR S&P 500 ETF (SPY), with 2.60% of shares outstanding. His $2.8 billion dollar stake can be traced back to the second quarter of 2009 when he first bought around 17.5 million shares at an average price of $89.45 for an 82.3% gain. Since that time, Dalio’s average cost on over 20 million shares is $95 per share with a 72% gain. This holding’s highest gain for Dalio was 82.3% in the second quarter of 2009. Dalio’s trading history shows only positive gains with SPY across 15 quarters.

Up 20% over 12 months, the SPDR S&P 500 ETF (SPY) trust is involved in the financial services industry. Their holdings are comprised of the 500 stocks in the S&P 500 Index, which is designed to capture the price performance of a large cross-section of the U.S. publicly traded stock market.

SPDR S&P 500 ETF (SPY) has a market cap of $123.08 billion; its shares were traded at around $163.06. The dividend yield of SPDR S&P 500 ETF (SPY) stocks is 2.00%.

1368142779643.png

VWO data by GuruFocus.com

No. 3: iShares MSCI Emerging Markets Indx ETF (EEM), Weighting: 25.6%, Shares Owned: 56,740,252, Value: $2.5 billion

Ray Dalio’s third top holding is iShares MSCI Emerging Markets Indx ETF (EEM) with 5.77% of shares outstanding. Dalio’s trading history began in the third quarter of 2009 when he bought around 1 million shares at an average price of $35.7, making a 23.3% gain. Since that time, his average cost on almost 58 million shares was $41 per share, with a 7% gain.

Up 9% over 12 months, iShares MSCI Emerging Markets Indx ETF (EEM) has a market cap of $41.566 billion; its shares were traded at around $44.03. The dividend yield of iShares MSCI Emerging Markets Indx ETF (EEM) stock is 1.90%.

1368143084072.pngEEM data by GuruFocus.com

No. 4: iShares MSCI Brazil Index ETF (EWZ), Weighting: 1.6%, shares Owned: 2,853,469, Value: $159 million

Ray Dalio’s fourth top holding is iShares MSCI Brazil Index ETF (EWZ) with 1.69% of shares outstanding. Dalio’s trading history began in the second quarter of 2012 when he bought around two million shares at an average price of $56.01, with a loss of 1.4%. Since that time, his average cost on almost three million shares was $55 per share, with a 0% gain. Dalio’s highest gain of 3.1% was in the fourth quarter of 2012 when he bought around 3.7 million shares.

Down 3% over 12 months, iShares MSCI Brazil Index ETF (EWZ) has a market cap of $8.75 billion; its shares were traded at around $55.23. The dividend yield of iShares MSCI Brazil Index ETF (EWZ) stock is 2.90%.

1368143197014.pngEWZ data by GuruFocus.com

No. 5: iShares IBoxx $ Invest Grade Corp Bond Fund (LQD), Weighting: 0.45%, Shares Owned: 363,755, Value: $44 million

Ray Dalio’s fifth top holding is iShares IBoxx $ Invest Grade Corp Bond Fund (LQD), with 0.17 shares outstanding. Dalio’s trading with this holding began in the fourth quarter of 2010 when he purchase 262,327 shares at an average price of $110.53, for a 9.7% gain. Since that time, his average cost on 363,755 shares is $112 per share for an 8% gain. His highest gain quarter was the first quarter of 2011 when he bought around 17,000 shares at an average price of $108.43 for a gain of 11.8%.

Up 4% over 12 months, the iShares IBoxx $ Invest Grade Corp Bond Fund (LQD) seeks investment results that generally correspond to the price and yield performance of the corporate bond market as defined by the iBoxx $ Liquid Investment Grade Index. This index measures the performance of a fixed number of highly liquid investment-grade corporate bonds. The index is a rules-based index consisting of up to 100 highly liquid, investment-grade, U.S. dollar-denominated corporate bonds that seek to maximize liquidity while maintaining representation of the corporate bond market. The iShares IBoxx $ Invest Grade Corp Bond Fund (LQD) invests in a representative sample of the securities included in the index that collectively has an investment profile similar to the Index.

The iShares IBoxx $ Invest Grade Corp Bond Fund (LQD) has a market cap of $25.68 billion; its shares were traded at around $121.21. The dividend yield of iShares IBoxx $ Invest Grade Corp Bond Fund (LQD) stock is 3.80%.

1368143535658.pngLQD data by GuruFocus.com

Guru Ray Dalio's Bridgewater Associates manages approximately $150 billion in global investments for a wide array of institutional clients, including foreign governments and central banks, corporate and public pension funds, university endowments and charitable foundations. The portfolio of Bridgewater Associates currently lists 211 stocks, 52 of them new, and a total value of $9.8 billion, with a quarter-over-quarter turnover of 28%. Here is the complete portfolio of Ray Dalio.

Also check out:

1. Ray Dalio's Undervalued Stocks

2. Ray Dalio's Top Growth Companies

3. Ray Dalio's High Yield stocks

4. Stocks that Ray Dalio keeps buying

Also check out the Undervalued Stocks, Top Growth Companies, and High Yield stocks of Ray Dalio.

The GuruFocus Real Time Picks features reports the stock purchases and sales that Gurus have made within the prior 2 weeks. This feature is for Premium Members only.

If you are not yet a Premium Member, we invite you for a 7-day Free Trial.

Use the GuruFocus Value Screen to find 52-Week Lows and discover potentially deep value stocks held by billionaire Guru investors.

The GuruFocus Score Board of Gurus shows which investors produced the largest average returns in the past 6 and 12 months, as well as on a historical basis.

About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 3.9/5 (8 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide