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Holly LaFon
Holly LaFon
Articles (9179)  | Author's Website |

Ray Dalio’s Bridgewater Boosts Gold and Emerging Markets Holdings

The $160 billion fund has more than half its long portfolio in emerging markets

November 13, 2017 | About:
Ray Dalio (Trades, Portfolio)’s Bridgewater, the largest hedge fund in the world, strongly increased its investments in emerging markets and gold during the third quarter, according to its portfolio announcement.

Exchange traded funds, composed of blocks of positions under a single category, form the bulk of Bridgewater’s portfolio. The $160 billion fund has more than half its long portfolio in emerging markets and the S&P 500 as of the end of the third quarter. The top 17 positions are a variety of ETFs.

In recent months, Dalio has embarked on a publicity tour propounding the Bridgewater management philosophy of radical transparency in his recently published book, “Principles.” He has also taken to LinkedIn to write reflective pieces about markets, investing and society. Many of them have warned about troubled times ahead, including a strong caution about the markets in “Risks Are Rising While Low Risks Are Discounted.”

“That appears to be the case now—i.e., prospective risks are now rising and do not appear appropriately priced in because of a) a backward looking at risk and b) corporate leveraging up has been high because interest rates are low relative to many companies’ projected ROEs and because past risks have been low,” Dalio said on Aug. 10.

Dalio also said he saw most political upheaval driving risks in the markets, saying he remained humble about knowing how to predict the outcome but aimed to keep adequate liquidity and diversification and “not be overly exposure to any particular economic outcomes.” He also recommended gold.

“We can also say that if the above things go badly, it would seem that gold (more than other safe haven assets like the dollar, yen, and treasuries) would benefit, so if you don’t have 5-10% of your assets in gold as a hedge, we’d suggest that you relook at this,” he wrote.

Below are the biggest moves in gold and emerging markets that Dalio’s Bridgewater made in their ETF holdings in the third quarter.

Vanguard FTSE Emerging Markets (VWO)

The cornerstone of Bridgewater’s portfolio is a 25.8% stake in Vanguard FTSE Emerging Markets. In the third quarter, Bridgewater increased the position by 11.98%, buying 9,452,305 shares, for a total of 88.3 million. The price of the ETF averaged $43 per share, increased 24.5% year to date.

Vanguard FTSE Emerging Markets has a market cap of $65.09 billion; its shares traded around $44.55 on Monday. The trailing 12-month dividend yield of Vanguard FTSE Emerging Markets stocks is 2.28%.

iShares MSCI Emerging Index Fund (EEM)

Bridgewater’s second biggest position is in iShares MSCI Emerging Index Fund, which it boosted 15.8% in the third quarter. The addition increased its holding to 65.4 million, or 19.7% of its long portfolio.

iShares MSCI Emerging Index Fund has a market cap of $37.99 billion; its shares were traded around $46.29. The trailing 12-month dividend yield of iShares MSCI Emerging Index Fund stocks is 1.28%.

iShares Core MSCI Emerging Markets (IEMG)

Bridgewater made its largest increased to iShares Core MSCI Emerging Markets, enlarging it by 259.4% to elevate it to the fourth top position in the portfolio. The transaction totaled 17.89 million shares bought, bringing its holding to 24.79 million shares, or 8.98% of the portfolio.

iShares Core MSCI Emerging Markets has a market cap of $40.62 billion; its shares traded around on Monday $55.86. The trailing 12-month dividend yield of iShares Core MSCI Emerging Markets stocks is 1.69%.


SPDR Gold Trust (GLD)

Bridgewater grew its SPDR Gold Trust (GLD) ETF position by 574.7%, the greatest of its ETF increases. The firm purchased 3.32 million shares to bring its holding to 3.89 million, or 3.18% of its portfolio.

SPDR Gold Trust has a market cap of $34.65 billion; its shares were traded around $121.40 Monday.

iShares Gold Trust (IAU)

Bridgewater made a 265.9% increase to its iShares Gold Trust position, buying 8.2 million shares for a total of 11,280,993 shares. The ETF had a 0.93% portfolio weight at the end of the third quarter. It also traded for $12 per share, increasing 10.8% year to date.

iShares Gold Trust has a market cap of $9.76 billion; its shares were traded around $12.29.

See more of Ray Dalio (Trades, Portfolio)’s Bridgewater portfolio here.

About the author:

Holly LaFon
I'm a financial journalist with a master of science in journalism from Medill at Northwestern University.

Visit Holly LaFon's Website

Rating: 4.0/5 (4 votes)



Alexv - 1 year ago    Report SPAM
Is this Ray Dalio (Trades, Portfolio) or Bridgewater portfolio? I think you made a mistake, saying that more that half of 160billions of bridgewater portfolio is held in emerging markets. Looks like it's portfolio of Ray Dalio (Trades, Portfolio) himself - 14,9 billions, because total amount of VWO is 3,849millions and it's 25,82% of total portfolio.

Holly LaFon
Holly LaFon premium member - 1 year ago

It's bridgewater's.

I said it is half of the long portfolio reported. They have many other strategies. Thanks.

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