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James Li
James Li
Articles (1321)  | Author's Website |

Ray Dalio's Bridgewater Dumps Treasury Bond ETF, Boosts 5 Positions in 2nd Quarter

The $165 billion hedge fund boosts several equity stakes as S&P 500 nears February high

Bridgewater Associates, the $165 billion hedge fund founded by Ray Dalio (Trades, Portfolio), disclosed this week that its biggest trades for the second quarter included the elimination of its iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) holding and increased bets in the following five equity securities: SPDR S&P 500 ETF (SPY), SPDR Gold Trust (GLD), iShares China Large-Cap ETF (FXI), Alibaba Group Holding Ltd. (NYSE:BABA) and iShares MSCI China ETF (NASDAQ:MCHI).

Dalio, co-chief investment officer of Bridgewater, invests based on several key principles, including working for what he wanted instead of what others want him to do, coming up with independent opinions and stress-testing them, avoiding overconfidence and wrestling with reality. Dalio wrote in chapter four of his "Changing World Order" series that the U.S. is approximately around 75% through the big cycle, which begins with one world order and culminates with a newer world order.


As of the quarter-end, Bridgewater's $5.96 billion equity portfolio contains 382 stocks, of which 136 represent new holdings. Despite this, exchange-traded fund holdings constitute over 80% of the portfolio.


Sold out: iShares 20+ Year Treasury Bond ETF

Bridgewater sold 1,692,081 shares of the iShares 20+ Year Treasury Bond ETF, reducing the equity portfolio 5.54%. Shares averaged $164.66 during the second quarter.


According to the iShares website, the ETF seeks to track the investment results of an index composed of U.S. Treasury bonds with maturities of over 20 years.


Bridgewater purchased 1,481,603 shares of the SPDR S&P 500 ETF, increasing the position 41.57% and the equity portfolio 7.66%. Shares averaged $292.20 during the second quarter.


According to the State Street Global Advisors website, the SPDR S&P 500 ETF seeks to provide investment results that mirror the Standard & Poor's 500 index. On Thursday, the index closed at 3,373.43, relatively unchanged from the previous close of 3,380.35 yet down just 0.375% from the Feb. 19 level of 3,386.15.


SPDR Gold Trust ETF

Bridgewater purchased 1,405,915 shares of the SPDR Gold Trust ETF, increasing the position 34.66% and the equity portfolio 3.95%. Shares averaged $161.08 during the second quarter.


According to State Street Global Advisors, the SPDR Gold Trust seeks to track the performance of the price of gold bullion. Gold prices tumbled from a record intraday high of $2,089.20 per Troy ounce last Friday to $1,931.70 per Troy ounce on Wednesday.


iShares China Large-Cap ETF

Bridgewater purchased 4,192,642 shares of the iShares China Large-Cap, increasing the position 717.54% and the equity portfolio 2.79%. Shares averaged $38.72 during the second quarter.


According to the iShares website, the ETF seeks to track the investment results of an index composed of large-cap Chinese equities that trade on the Hong Kong stock exchange.


Bridgewater purchased 672,442 shares of Alibaba, increasing the position 241.75% and the equity portfolio 2.43%. Shares averaged $207.72 during the second quarter.


GuruFocus ranks the Chinese e-commerce giant's profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7, consistent revenue growth and profit margins that are outperforming over 95% of global competitors.


iShares MSCI China ETF

Bridgewater purchased 1,906,526 shares of iShares MSCI China, increasing the position 486.89% and the equity portfolio 2.09%. Shares averaged $61.28 during the second quarter.


According to the iShares website, the ETF seeks to track the results of an index composed of Chinese equities that are available to international investors.

Disclosure: Long iShares MSCI China ETF.

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About the author:

James Li
I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

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