Ray Dalio’s Bridgewater Associates is the world’s largest hedge fund with $196.8 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 9.5% gain for the year, compared with the S&P 500’s 19.4% plunge.
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With the market off to a strong start in 2023, here are Bridgewater’s nine top stock and exchange-traded fund, or ETF, holdings, according to its latest 13F filings:
| Investment | Portion of Portfolio |
| iShares Core MSCI Emerging Markets ETF (ticker: IEMG) | 5.3% |
| iShares Core S&P 500 ETF (IVV) | 4.6% |
| Procter & Gamble Co. (PG) | 4.5% |
| Johnson & Johnson (JNJ) | 3.4% |
| PepsiCo Inc. (PEP) | 3.1% |
| Coca-Cola Co. (KO) | 3.1% |
| SPDR S&P 500 ETF Trust (SPY) | 3.1% |
| McDonald’s Corp. (MCD) | 2.6% |
| Costco Wholesale Corp. (COST) | 2.6% |
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 about 28% exposed to China. After adding 3.3 million shares in the first quarter, Bridgewater holds 17.9 million shares of the IEMG fund worth about $871.5 million.
iShares Core S&P 500 ETF (IVV)
The good news for investors concerned about the stock market outlook in 2023 is that Dalio’s second-biggest investment is iShares’ IVV S&P 500 ETF. Dalio is seemingly betting the U.S. stock market will continue to rebound from its 2022 weakness and the U.S. economy will avoid a 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 1.8 million shares of the IVV ETF worth $751.8 million, or about 4.6% 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 underperformed the S&P 500 so far in 2023, generating a total return, which includes dividends, of 4% through May 16, compared with the S&P’s 7% advance. Consumer staples stocks like Procter & Gamble are typically considered solid defensive investments during periods of market uncertainty. Procter reported 3.5% revenue growth and 1.2% net income growth in the first quarter. Bridgewater owns 4.94 million shares of PG stock worth $735.3 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 grew 5.6% in the fourth quarter. The company completed the spinoff of its Kenvue Inc. (KVUE) consumer business in May, the largest restructuring in Johnson & Johnson’s history. JNJ stock is down 9.2% so far in 2023, but Bridgewater bought the dip in the first quarter, adding 19,563 shares. The firm now owns 3.59 million shares of JNJ stock worth more than $556 million.
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PepsiCo Inc. (PEP)
PepsiCo is another blue-chip consumer staples stock that is an excellent defensive play in an uncertain environment. Unlike other defensive stocks, PepsiCo shares have performed fairly well so far in 2023, generating a year-to-date total return of 7.8%. In the first quarter, PepsiCo reported 10.2% revenue growth and $1.9 billion in net income. Dalio has owned PepsiCo shares since the first quarter of 2020, but he reduced his stake by about 7% in the first quarter. Bridgewater still holds roughly 2.8 million shares of PEP stock worth more than $511.8 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 of the hedge fund’s largest holdings. Unfortunately, KO shares have lagged behind PepsiCo’s shares, essentially flatlining so far in 2023. In the first quarter, Coca-Cola reported 5% revenue growth and a 3% gain 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 8.1 million shares of KO stock worth more than $505.2 million.
[SEE: Stocks Warren Buffett Just Bought and Sold.]
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, or $9 annually per $10,000 invested, and plenty of liquidity. 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 10% in the first quarter, selling 140,877 shares. Bridgewater now owns 1.23 million shares of the SPY fund, worth about $504.8 million.
McDonald’s Corp. (MCD)
McDonald’s is the world’s largest fast food restaurant chain. Bridgewater invested in McDonald’s in the first quarter of 2020, but Dalio has a much longer history with the company. In his early days on Wall Street in the 1970s, Dalio worked with a chicken producer to hedge production prices using corn and soymeal futures, which allowed the company to offer McDonald’s the fixed price for chicken it needed to launch its iconic Chicken McNuggets in 1983. After selling 40,642 shares in the first quarter, Bridgewater holds 1.54 million shares of MCD stock worth about $430.1 million.
Costco Wholesale Corp. (COST)
Costco is a leading members-only discount retailer. The company has seemingly been immune to the online competition from Amazon.com Inc. (AMZN) that has crushed other retailers. In fact, COST stock has more than doubled the total return of the S&P 500 over the past decade. Costco is Dalio’s largest bet on a discount retailer, but he also holds large stakes in competitors Target Corp. (TGT) and Walmart Inc. (WMT). In the first quarter, Dalio sold 76,215 Costco shares, reducing his stake by about 8%. However, Bridgewater still owns about 861,000 shares of COST stock worth more than $427 million.
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Billionaire Ray Dalio’s 9 Top Stock and ETF Picks originally appeared on usnews.com
Update 05/17/23: This story was published at an earlier date and has been updated with new information.
