Ray Dalio’s Bridgewater Associates is the world’s largest hedge fund with $126.4 billion in assets. Dalio himself has a net worth of roughly $19 billion, according to Forbes. Bridgewater’s popular Pure Alpha II fund struggled during the wild market swings in 2020, generating a 12.6% loss for the year.
However, Dalio and the Pure Alpha II fund outperformed in a weak market environment in 2022, posting an impressive 6% gain through early December.
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With the possibility of a better year ahead in 2023, here are Bridgewater’s nine top stock and fund holdings, according to its latest 13F filings:
— iShares Core S&P 500 ETF (ticker: IVV)
— Procter & Gamble Co. (PG)
— iShares Core MSCI Emerging Markets ETF (IEMG)
— Johnson & Johnson (JNJ)
— PepsiCo Inc. (PEP)
— Vanguard FTSE Emerging Markets ETF (VWO)
— Coca-Cola Co. (KO)
— SPDR S&P 500 ETF Trust (SPY)
— Walmart Inc. (WMT)
iShares Core S&P 500 ETF (IVV)
The good news for investors concerned about the stock market
outlook in 2023 is that Dalio’s biggest investment is iShares’ IVV S&P 500 exchange-traded fund, or ETF. In other words, Dalio is betting the U.S. stock market will rebound from its 2022 weakness and the U.S. economy will presumably avoid a prolonged or severe recession. The S&P 500 is weighted by market capitalization, meaning its top holdings include Apple Inc. (AAPL), Microsoft Corp. (MSFT) and Alphabet Inc. (GOOG, GOOGL). Bridgewater owns more than 2 million shares of the IVV ETF worth $793.2 million, or about 4.3% of Bridgewater’s total portfolio.
Procter & Gamble Co. (PG)
Procter & Gamble is a blue-chip
consumer products company and owner of popular brands such as Pampers, Tide and Bounty. It is also Bridgewater’s single-largest individual stock holding. PG shares have significantly underperformed the S&P 500 so far in 2023, generating a year-to-date total return of negative 8.9% through Feb. 16. Consumer staples stocks like Procter & Gamble are typically considered solid defensive investments during periods of market uncertainty. Procter reported a 0.9% drop in revenue and a 6.9% drop in net earnings in the fourth quarter. Bridgewater owns almost 5 million shares of PG stock worth $757.1 million.
iShares Core MSCI Emerging Markets ETF (IEMG)
Risks associated with U.S. and Chinese regulatory crackdowns and threats to delist Chinese stocks seemingly became too high for Dalio to justify some of his largest Chinese investments in 2022. Last year, Bridgewater exited stakes in Chinese stocks Alibaba Group Holding Ltd. (BABA
), JD.com Inc. (JD), Bilibili Inc. (BILI) and NetEase Inc. (NTES). Instead, Dalio appears to be taking a more diversified approach to China via the IEMG fund, an emerging market ETF that is only around 28% exposed to China. After selling 347,293 shares in the fourth quarter, Bridgewater holds more than 14.5 million shares of the IEMG fund worth about $679.6 million.
Johnson & Johnson (JNJ)
Johnson & Johnson is a blue-chip global pharmaceutical
and health care product producer. Dalio first started loading up on Johnson & Johnson during the initial U.S. COVID-19 outbreak in the first quarter of 2020. Johnson & Johnson’s revenue declined 4.4% in the fourth quarter, but the company’s plan to spin off its consumer business into a new public company in 2023 could serve as a bullish catalyst. Bridgewater trimmed its exposure to Johnson & Johnson significantly in the fourth quarter, selling more than 1.14 million shares. However, the firm still owns 3.56 million shares of JNJ stock worth more than $630 million.
[READ: Billionaire George Soros’ 7 Top Stock Picks in 2023.]
PepsiCo Inc. (PEP)
PepsiCo is another blue-chip consumer staples
stock that is an excellent defensive play in an uncertain environment. Like other defensive stocks, PepsiCo shares have lagged the S&P 500 so far in 2023, generating a year-to-date total loss of 2.9% through Feb. 16. In the fourth quarter, PepsiCo reported 10.9% revenue growth and $518 million in net income. Dalio has owned PepsiCo shares since the first quarter of 2020, but he reduced his stake by about 24% in the fourth quarter. Bridgewater still holds roughly 3.02 million shares of PEP stock worth more than $545.6 million.
Vanguard FTSE Emerging Markets ETF (VWO)
The Vanguard FTSE Emerging Markets Stock Index Fund ETF is another popular emerging market ETF. VWO is a way for Dalio to diversify his fund’s bet on emerging market economies, such as China, Taiwan and Brazil. The VWO fund is heavily exposed to geopolitical risks given Chinese and Taiwanese stocks make up nearly 44% of the fund’s holdings, but it may also benefit from the lifting of China’s COVID-19 restrictions in 2023. Bridgewater sold about 6% of its VWO fund shares in the fourth quarter, but the firm still holds 13.8 million shares worth roughly $539 million.
Coca-Cola Co. (KO)
Dalio rarely puts all his eggs in one basket. In addition to his large stake in PepsiCo, competitor Coca-Cola is another one of the fund’s largest holdings. Unfortunately, KO shares have lagged PepsiCo’s shares so far in 2023. In the fourth quarter, Coca-Cola reported 7% revenue growth but a 1% drop in global unit case volume. Coca-Cola has also been a top long-term
holding of fellow billionaire and Berkshire Hathaway Inc. (BRK.A, BRK.B) CEO Warren Buffett, putting Dalio in good company. Bridgewater holds roughly 8.4 million shares of KO stock worth more than $535.6 million.
SPDR S&P 500 ETF Trust (SPY)
The SPDR S&P 500 ETF Trust is an S&P 500 fund that’s very similar to the IVV fund but is issued by State Street. The fund has a low 0.09% expense ratio and plenty of liquidity
, and it tracks the S&P 500. Likely the only reason Dalio owns both the SPY and the IVV ETFs is to diversify his exposure to the S&P 500. Dalio reduced his SPY stake by 6% in the fourth quarter, selling 89,318 shares. Bridgewater now owns 1.37 million shares of the SPY fund worth about $525.5 million.
Walmart Inc. (WMT)
Walmart is a leading discount retailer
. Despite struggles with inventory management and supply chain disruptions, Walmart’s business and stock have performed relatively well in the past year. Walmart reported 8.7% revenue growth and 8.2% U.S. same-store sales growth in the most recent quarter. In addition, global advertising revenue was up 30% and online sales were up 16% last quarter. Walmart is Dalio’s largest bet on a discount retailer, but he also holds stakes in competitors Target Corp. (TGT) and Costco Wholesale Corp. (COST). Bridgewater now owns about 3.4 million shares of WMT stock worth more than $482 million.
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Billionaire Ray Dalio’s 9 Top Stock and ETF Picks originally appeared on usnews.com
Update 02/17/23: This story was previously published at an earlier date and has been updated with new information?
