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James Li
James Li
Articles (1249)  | Author's Website |

Bridgewater’s Top 5 Metals and Mining Holdings

Fund’s co-chairman advocates putting money in gold yet reports a loss year to date

July 22, 2019 | About:

The Financial Times reported on Monday that Bridgewater Associates' Pure Alpha Fund returned -4.9% during the first half of the year as “global equity and bond markets bounced on hopes of looser monetary policy.” Despite this, the fund pared some of its losses and is down just -1.45% in the year to mid-July, someone close to the fund told the publication.


The Financial Times also said while the fund “declined to comment” on the poor performance, its decline in January suggests it “went into the new year expecting further turbulence” following the December 2018 market selloff, but instead suffered as markets recovered.

Fund suggested investing in gold

Dalio said in a LinkedIn post that securities with “equity-like returns” are overbought and thus expected to have diminishing returns. As of today, Berkshire Hathaway Inc. (BRK.A)(BRK.B) CEO Warren Buffett (Trades, Portfolio)’s favorite market indicator stands at 146.2%, above the significant overvaluation threshold of 115% and close to its all-time high of 148.5%.


The Bridgewater co-chairman continued his post with comments regarding “good real returning investments” -- those that do well when the value of money is “being depreciated and domestic and international conflicts are significant.” Dalio mentioned that gold is such an investment.

The metals and mining sector includes companies engaged in the exploration and extraction of precious metals, including gold. Such companies are sensitive to changes in the price of gold, i.e., the share price of companies engaging in gold production typically increase when the price of gold increases.


Bridgewater has not released its second-quarter portfolio as the deadline is 45 days after quarter-end. As of the March quarter, the basic materials sector represents 1.48% of the equity portfolio, with gold stocks representing 0.22% of the sector weight.


According to first-quarter portfolio statistics, Bridgewater Associates’ top-five holdings in the metals and mining industry were Cleveland-Cliffs Inc. (NYSE:CLF), Barrick Gold Corp. (NYSE:GOLD), Franco-Nevada Corp. (NYSE:FNV), Agnico Eagle Mines Ltd. (NYSE:AEM) and Goldcorp Inc. (NYSE:GG).


Bridgewater owns 1,876,999 shares of Cleveland-Cliffs, giving the position 0.11% weight in the equity portfolio. The shares averaged $9.97 during the first quarter.


The Cleveland-based company operates iron ore mines in North America, including one in Australia. GuruFocus ranks the company’s profitability 5 out of 10: Although the company’s net profit margins and returns outperform over 85% of global competitors, the website lists several warning signs like declining revenue and operating margins over the past five years.


Other gurus with holdings in Cleveland-Cliffs include Ken Fisher (Trades, Portfolio) and 2019 Value Conference keynote speaker Chuck Royce (Trades, Portfolio).


Barrick Gold

The fund owns 671,783 shares of Barrick Gold, dedicating 0.06% equity portfolio weight to the holding. Shares averaged $12.91 during the first quarter.


The Toronto-based gold producer operates mines in North America, South America, Australia and Africa. GuruFocus ranks Barrick Gold’s financial strength 5.2 out of 10: Although the company has a 37.41% trailing-12-month return on invested capital, Barrick Gold’s Altman Z-score suggests possible financial distress, while its Beneish M-score suggests possible earnings manipulation.


Other gurus with holdings in Barrick Gold include First Eagle Investment (Trades, Portfolio) and Pioneer Investments (Trades, Portfolio).



Bridgewater owns 89,817 shares of Franco-Nevada, giving the position 0.04% equity portfolio weight. Shares averaged $74.11 during the first quarter.


Toronto-based Franco-Nevada owns a diversified portfolio of precious metals and royalty streams, which the company manages. GuruFocus ranks the company’s financial strength 7.8 out of 10 on several positive indicators, which include debt ratios that outperform over 82% of global competitors and a robust Altman Z-score of 33.96.


Jim Simons (Trades, Portfolio) also has a holding in Franco-Nevada.


Agnico Eagle Mines

The fund owns 113,796 shares of Agnico Eagle Mines, giving the position 0.03% equity portfolio weight. Shares averaged $42.24 during the first quarter.


Toronto-based Agnico operates gold mines in Canada, Mexico and Finland. GuruFocus ranks the company’s financial strength 5 out of 10 on a few warning signs, which include a weak Piotroski F-score of 2 and debt ratios that underperform over 58% of global competitors.



The fund owns 418,220 shares of Goldcorp, giving the position 0.03% equity portfolio space. Shares averaged $10.72 during the first quarter.


The Vancouver, British Columbia-based company operates gold mines in Canada, the U.S., Mexico and Latin America. GuruFocus ranks Goldcorp’s financial strength 4.5 out of 10 on several weak signs, which include a Piotroski F-score of 3, interest coverage of 0.13 and an Altman Z-score of -0.64. These values suggest poor business operations.


Disclosure: No positions.

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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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