Ray Dalio’s Bridgewater Associates is the world’s second-largest hedge fund, after Citadel Advisors, with $196.8 billion in assets under management as of March 30. Even after giving more than $1 billion to philanthropic causes, Dalio himself has an estimated net worth of roughly $19 billion, according to Forbes.
Dalio is no longer Bridgewater’s chairman and co-chief investment officer, having stepped down to an advisory role while retaining a seat on the board in late 2022, but his fund still performs extremely well. Bridgewater’s flagship Pure Alpha fund outperformed in a weak market in 2022, posting an impressive 9.5% gain for the year. Here are Bridgewater’s nine top stock and fund holdings as of June 30, according to the hedge fund’s latest 13F filings:
|Investment||Portion of portfolio|
|iShares Core S&P 500 ETF (ticker: IVV)||5.5%|
|iShares Core MSCI Emerging Markets ETF (IEMG)||5.5%|
|Procter & Gamble Co. (PG)||4.3%|
|Johnson & Johnson (JNJ)||3.3%|
|Coca-Cola Co. (KO)||3.1%|
|PepsiCo Inc. (PEP)||2.9%|
|SPDR S&P 500 ETF Trust (SPY)||2.8%|
|Costco Wholesale Corp. (COST)||2.7%|
|McDonald’s Corp. (MCD)||2.6%|
iShares Core S&P 500 ETF (IVV)
The good news for investors concerned about the stock market outlook in the second half of 2023 is that Bridgewater’s biggest investment is iShares’ exchange-traded fund, or ETF, which tracks the S&P 500. Dalio is seemingly betting the U.S. stock market rally will continue 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 about 2 million shares of the IVV ETF worth $883.1 million as of market close on Aug. 17, comprising about 5.5% of Bridgewater’s total portfolio.
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 27% exposed to China. After adding 70,307 shares in the second quarter, Bridgewater holds about 17.9 million shares of the IEMG fund worth about $866.9 million as of Aug. 17.
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 year-to-date total return, which includes dividends, of 2.3%. Consumer staples stocks like Procter & Gamble are typically considered solid defensive investments during periods of market uncertainty. Procter reported 5.3% revenue growth and a 10.9% net income growth in the second quarter. Bridgewater owns about 4.6 million shares of PG stock worth $702.2 million as of Aug. 17.
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 6.3% in the second quarter. The company completed the spin-off of its Kenvue Inc. (KVUE) consumer business in May, Johnson & Johnson’s largest restructuring in history. JNJ stock is down 0.04% year to date through Aug. 17 on a total return basis, and Bridgewater reduced its stake in the second quarter, selling 406,023 shares. The firm now owns about 3.2 million shares of JNJ stock worth $553.6 million as of Aug. 17.
Coca-Cola Co. (KO)
Coca-Cola is another blue-chip consumer staples stock that is an excellent defensive play in an uncertain environment. Unfortunately, KO shares have lagged behind the S&P 500 so far in 2023, losing 3.3% on a total return basis. In the second quarter, Coca-Cola reported 6% revenue growth and 34% year-over-year net income growth despite no change 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 8.2 million shares of KO stock worth $497.9 million as of Aug. 17.
PepsiCo Inc. (PEP)
Dalio rarely puts all his eggs in one basket. In addition to his large stake in Coca-Cola, competitor PepsiCo is another one of the fund’s largest holdings. PepsiCo’s 0.1% year-to-date total return is lackluster, but it has at least outperformed Coca-Cola. In the second quarter, PepsiCo reported 10.4% revenue growth and $2.8 billion in net income. Dalio has owned PepsiCo shares since the first quarter of 2020, but he reduced his stake by about 8% in the second quarter. Bridgewater still holds roughly 2.6 million shares of PEP stock worth $458 million as of Aug. 17.
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 for every $10,000 invested, and plenty of liquidity. Likely the only reason Bridgewater owns both the SPY and the IVV ETFs is to diversify its exposure to the S&P 500. Bridgewater reduced its SPY stake by 16% in the second quarter, selling 197,335 shares. Bridgewater now owns about 1 million shares of the SPY fund worth $451.9 million as of Aug. 17.
Costco Wholesale Corp. (COST)
Costco is a leading members-only discount retailer. Costco 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 Walmart Inc. (WMT) and Dollar Tree Inc. (DLTR). In the second quarter, Bridgewater sold 53,597 Costco shares, reducing its stake by about 6%. However, it still owns 807,709 shares of COST stock worth $441.9 million as of Aug. 17.
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 119,385 shares in the second quarter, Bridgewater holds about 1.4 million shares of MCD stock worth $400 million as of Aug. 17.
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Update 08/18/23: This story was previously published at an earlier date and has been updated with new information.