Bridgewater Associates stands as the world’s largest hedge fund. Billionaire investor Ray Dalio founded the firm in 1975. Today, it manages nearly $80 billion in assets, with ownership in over 740 different stocks. Dalio stepped down from daily operations in 2022, but his principles continue to guide the hedge fund after 47 years of leadership.
The two largest holdings of Bridgewater Associates are exchange-traded funds (ETFs): the iShares Core S&P 500 ETF (NYSE:IVV) and the iShares Core MSCI Emerging Markets ETF (NYSE:IEMG). These holdings represent 5.7% and 5.3% of the fund’s total portfolio, respectively. It’s a strategy that allows Dalio to own the 500 biggest companies in the U.S. and the top stocks in emerging markets. This approach ensures stability and growth while diversifying across hundreds of companies and geographies.
Aside from ETFs, the three largest individual stock positions in Dalio’s portfolio are as follows:
1. Costco (NASDAQ:COST) is the third-largest holding, constituting 2.5% of the total. Bridgewater held over 687,000 shares worth $454 million at the end of the fourth quarter. The hedge fund has been consistently reducing its stake as Costco’s stock price has increased. Dalio doesn’t hesitate to take profits or “rotate the portfolio”.
2. Coca-Cola (NYSE:KO) is the second-largest holding in the portfolio, making up 2.6% of the total. Bridgewater owns 8 million shares worth $472 million. The hedge fund hasn’t significantly adjusted this position, and the share count remains fairly consistent. Coca-Cola is recognized for its steady and reliable dividend, currently yielding 3.1% annually. The company has increased the payout every year since 1967, earning it the title of Dividend King.
3. The largest stock holding in Bridgewater Associates’ portfolio is consumer products giant Procter & Gamble (NYSE:PG), making up 3.8% of the total. The hedge fund owns 4.6 million shares worth $680 million. Procter & Gamble’s products typically hold the No. 1 or No. 2 selling position in their respective markets. This consistency and premium pricing help boost profits.
Consumer-facing companies are a favorite of the fund. Consumer discretionary stocks make up over 29% of the portfolio, with consumer staples comprising another 11%. Six of the top seven holdings are consumer-oriented stocks, representing almost 16% of the portfolio.
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