Bridgewater Associates Plunge Into ETFs

Renowned hedge fund manager Ray Dalio added more ETFs to his portfolio in the third quarter as his fund extends exposure to the emerging markets. Bridgewater Associates, the world’s largest hedge fund with US$130 billion assets under management, invested an additional US$640 million in two emerging markets ETFs on top of existing stakes: namely – Vanguard MSCI Emerging Markets ETF (VWO) (+10,479,574 shares) and the iShares MSCI Emerging Market ETF (EEM) (+1,576,092 shares). Together with the SPDR S&P 500 ETF Trust (SPY) (+145,700 shares), the ETFs make up the top three additions that Ray Dalio added to his fund in the third quarter by market value.

Contrary to value managers which tend to maintain most of its positions from quarter to quarter, the global-macro minded fund has a very volatile capital allocation and portfolio management process. In the third quarter, Bridgewater added 94 new positions worth US$282 million and exited out of 51 positions worth US$264 million.

Amongst its largest additions in the latest quarter include: Berkshire Hathaway Class B (BRK.B) (+238,397 shares), BCE Inc (BCE) (+436,937 shares), Microchip Technology Inc (MCHP) (+422,376 shares) and Nucor Corp (NUE) (+329,712 shares).

Bridgewater also removed entire stakes in at least: Best Buy (BBY) (-1,237,022 shares), Symantec Corp (SYMC) (-1,709,090 shares, Applied Materials Inc (AMAT) (-1,844,188 shares) and Eaton Corp (ETN) (-393,142 shares).

Lastly, here are the top 10 holdings of Ray Dalio’s hedge fund by market value:

 

1. SPDR S&P 500 ETF Trust ( SPY, Earnings, Analysts, Financials): The Trust corresponds to the price and yield performance of the S&P 500 Index.

Added 145,700 shares in the third quarter to a total holding of 18,265,000 shares

 

2. Vanguard MSCI Emerging Markets ( VWO, Earnings, Analysts, Financials):  The Fund’s investment objective seeks to track the performance of an index that measures the investment return of stocks issued by companies located in emerging market countries.

Added 10,479,574 shares in the third quarter to a total holding of 49,279,896 shares

 

3. iShares MSCI Emerging Markets ( EEM, Earnings, Analysts, Financials): The Fund’s investment objective is to seek investment results that correspond to the price and yield performance of publicly traded equity securities in global emerging markets, as measured by the MSCI Emerging Markets Index (the Index).

Added 1,576,092 shares in the third quarter to a total holding of 33,302,492 shares

 

4. iShares MSCI Brazil ( EWZ, Earnings, Analysts, Financials): The Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the Brazilian market, as measured by the MSCI Brazil Index (the Index).

Sold 849,717 shares in the third quarter for a remaining holding of 1,152,983 shares

 

5. Microsoft Corp ( MSFT, Earnings, Analysts, Financials): Develops, licenses, and supports a range of software products and services for various computing devices worldwide. Market cap at $227.92B, most recent closing price at $27.08.

Sold 44,200 shares in the third quarter for a remaining holding of 1,494,104 shares

 

6. iShares iBoxx Invest Grade Corp Bd ( LQD, Earnings, Analysts, Financials): The Fund seeks investment results that correspond generally to the price and yield performance, of the corporate bond market as defined by the iBoxx $ Liquid Investment Grade Index.

Bought 17,327 shares in the third quarter for a total holding of 356,955 shares

 

7. Safeway Inc ( SWY, Earnings, Analysts, Financials): Operates as a food and drug retailer in North America. Market cap at $3.96B, most recent closing price at $16.54.

Added 774,684 shares in the third quarter for a total holding of 2,642,818 shares

 

8. Hewlett-Packard Co ( HPQ, Earnings, Analysts, Financials): Offers various products, technologies, software, solutions, and services to individual consumers and small- and medium-sized businesses (SMBs), as well as to the government, health, and education sectors worldwide. Market cap at $24.3B, most recent closing price at $12.36.

Added 358,400 shares in the third quarter for a total holding of 2,309,000 shares

 

9. Dell Inc ( DELL, Earnings, Analysts, Financials): Provides integrated technology solutions in the information technology (IT) industry worldwide. Market cap at $16.95B, most recent closing price at $9.77.

Added 1,518,274 shares in the third quarter for a total holding of 3,806,005 shares

 

10. Apollo Group Inc ( APOL, Earnings, Analysts, Financials): Provides educational programs and services at the undergraduate, master’s, and doctoral levels. Market cap at $2.16B, most recent closing price at $19.18.

Added 520,294 shares in the third quarter for a total holding of 982,533 shares

 

Performance charts for the stocks and ETFs listed above: 

Written by SiHien Goh

 

 

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