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Ray Dalio Consistently Deliver Returns

July 11, 2014

In this article let's take a look at Ray Dalio (Trades, Portfolio), the founder and majority owner with a 84% stake in Bridgewater Associates Intermediate Holdings (BAIH), the hedge fund that manages $150 billion in assets under management. Bridgewater Associates operates as an international, employee-owned hedge fund manager. It provides its services to pension and profit sharing plans, pooled investment vehicles, corporations and governmental entities. Since its inception in 1975, Bridgewater has generated net gains of $35.8 billion and that success made this guru the 84th richest person in the world, according to Forbes.

Industry Return

The $2.7 trillion hedge-fund industry posted gains of 1.1% in June. It was the biggest monthly advance in almost a year. In particular, the equity, multistrategy and macro hedge funds advanced in 2014. They performed returns of 2.5% for the first half of the year, according to the Bloomberg Global Aggregate Hedge Fund Index (an index weighted by market capitalization which tracks 2,269 funds).

Dalio´s Funds

Bridgewater Associates charges clients a 3% management fee and collects 20% of the profits for its two primary funds, Pure Alpha I and II. Pure Alpha II rose 1.6% last month and 7.8% in the first six months of the year and last year the fund returned 5%.

Further, it charges a maximum 0.5% management fee and 10% of profits for its two All Weather portfolios. The All Weather fund has returned 11.16% year-to-date, according to a report reviewed by Forbes. In the same time frame, the Standard & Poor’s 500 index returned 6.1%. The fund is up 17.01% in the last 12 months.

The All Weather fund consists of funds worth more than $70 billion in assets, with a strategy which leverages up bond investments in an attempt to balance out portfolios. As it names suggests, it is supposed to generate positive performance in every market environment. Nevertheless, last year the fund was down by about 4%.

Other Hedge Funds´ Returns

John Paulson (Trades, Portfolio)’s fund gained 6.3% in June and a year-to-date return of 11.4%. Dmitry Balyasny, who manages the $5.8 billion hedge-fund Balyasny Asset Management LP, posted a 1% June gain in its Atlas Global fund, and a 3.8% year-to-date. Paul Tudor Jones (Trades, Portfolio) registered a 0.3% gain in June in its BVI Global Fund and a 4.1% loss in the year. On the other hand, MKP Capital Management LLC, the fund managed by Patrick McMahon, registered a loss of 0.9% last month and 5.7% year-to-date.

Disclosure: Omar Venerio holds no position in any stocks or funds mentioned.

About the author:

Omar Venerio is capital markets, derivatives, corporate finance and financial management professor. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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