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World's Largest Hedge Fund Dumped 31% Of Its US Equity Holdings In The Third Quarter
The world's biggest hedge fund, Ray Dalio's Bridgewater Associates got into some hot water in the past few months when it was accused by many members of the underperforming "hedge fund hotel" club for being the "risk parity" catalyst that sent the market tumbling in August, and perhaps for being the catalyst for the August 24 market crash.
And while the bulk of Bridgewater's asset are in various commodities and futures, most of which are never reported to the public, earlier today it did disclose its long holdings in public equities when it filed its latest 13F. Perhaps those accusing Bridgewater of being the market-moving catalyst did have a point, because after posting a total AUM of $10.8 billion at June, this total declined by a whopping 31% to just $7.5 billion as of September 30.
Here is what Brigewater was dumping (and adding).
Bridgewater sold 41% of its holdings in the world's two largest EM ETFs in the third quarter amid a rout in developing-nation assets. Specifically, it cut its investments in Vanguard Group Inc. and BlackRock Inc.’s ETFs to a combined 104 million shares, from 175 million in the previous three-month period.
The value of the ETF holdings dropped more than 50 percent to $3.4 billion as a result of share price declines and the divestments.
In other words, if anyone is looking for the culprits behind the aggressive ETFlash Crash of August 24, Bridgewater may indeed be a good starting point.
As a result of this major unwind in Emerging Market exposure, Bridgewater's total US public equity holdings dropped 31%.
As Bloomberg adds, the company has said the impact of emerging-market losses is likely to be more widespread than in the crises of the 1980s and 1990s because investors have more money invested in developing markets. Of course, that also means that the company's prior belief in an EM resurgence has gone the way of the "beautiful deleveraging."
The reduction in the emerging-market investments marked a sharp reversal after Bridgewater had steadily boosted its holdings in recent years.
Its holdings in the $36 billion Vanguard FTSE Emerging Markets ETF dropped to 67.4 million shares by September, from a peak of 116.2 million in December. It had 19 million shares in June 2011.
The hedge fund’s investment in the $23 billion iShares MSCI Emerging Markets ETF fell to 36.5 million shares from 80.1 million a year earlier.
Also notable: Bridgewater's SPY holdings declined by 230,000 shares, which happened at the same time as Dalio was buying up single name constituents of the ETF. Was that the risk-imparity pair trade?
Finally, note that while Bridgewater was buying up single names as it was selling ETFs, it also sold half its AAPL stake.
Altogether, a dramatic deleveraging and gross derisking over the third quarter. The question is whether now that Bridgewater has once again rerisked, it will repeat the whole exercise all over again leading to the next market crash.
Finally, here is a break down of Bridgewater's top 10 publicly held equities.
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The market news is just so lovely the last 4 days...
In Less Than THREE…. Months….Over 5000 New Hedge Funds Launch In China! ... 3 months after that article, china crashed.watch this strange hedge fund recruiting video that was leaked
seriously...yer still pluggin yer garage band?
Coke...Pepsi...Apple...I-Paper...
Ray certainly thinks outside the box.
One can not simply "be" Krautrock.
Ray Dalio? Comeon you must be kidding! He likes that barbarous relic gold. There must be something wrong with him. Stawks and housing only go up Ray!
Cousin Ray, he talk about gold in public anymore, people think there's somethin' not right with him.
STFD??????
STFR - Short The F^ckin Rip
Fixed it----
Somebody needs to yell FIRE!!!!
Lets get that Doom Ball rolling again...
3 trading days max....
Just as the big money knew when to buy, is it now a shock that the same money is out before the bottom drops?
As it will be there to buy it all back and more for pennies on the SDR when the blood flows in the streets.
damn that's the shittiest portfolio i could dream up
My guess is this ridiculous retail-grade portfolio hedges a particular element of risk in massive, complex derivative portfolio in some obscure way. Bridgewater slices risk in 8 different ways then plays the relationships among them, so we are just looking at the big toe of the beast without knowing what the rest looks like.
If I were constructing a global financial market model, as Bridgewater does, one driver of the model certainly would be what John Q. Idiot retail investor is plowing money into. I'd certainly want an angle of exposure to that and an ability to move that market.
Or it's just window dressing, someone at Bridgewater's idea of an inside-joke mocking the 13F disclosure requirement.
Not all hedge funds actually hedge.
Vanguard & BlackRock are Goldmanesque EVIL.
I bet he goes to swinger parties with Bogle & Fink
Mistake in the chart: It should be $MN and not $BN.
EDIT: Never mind, seems like it has been corrected. Thx ZH!
can someone help me....he has $2,229,014 Billion of Vanguard ETF? Even in the world of funny money that is a big number
I'll take two, will this cover it?
https://upload.wikimedia.org/wikipedia/commons/3/3e/Zimbabwe_%24100_tril...
Most of Bridgewater's clients are pension funds and sovereign wealth funds. They do not deal with retail-level investors.
Assets dropped to "just" $7.5 billion. That's really going to suck for Dalio collecting the 2% base fee.
And, as you implied, the strategy is risk parity. That often requires large changes in the allocation of the portfolio by definition. But hey, if you can make a story breaking a billionaire's balls over some short-term underperformance, I say go for it.
More click bait... which is becoming more common around these parts. Perhaps instead of joining with ABC Media ZH would have found a better fit merging with the Daily Mail.
Bridgewater has roughly $150 bllion under management. Useless article and ZeroHedge seems to be losing more and more of it's "journalistic integrity" every day.
"Journalistic integrity"... That's right up there with "Postal service" and "Jumbo Shrimp!" ;)
Provide to link to your point. If they are 150 billion under management. Show us the information. Stop being a cunt rattling off Zerohedge falsehoods.
http://www.bwater.com/home/our-company/company.aspx
Use Google, assclown.
Fuck off twat. I just asked for your link. Using Google is a joke in your hand. Keep stroking it. BTW. Watch this.
Era Of Shattered Illusions - YouTube
You bore me with your idiocy. Good night.
Don't forget to brush your teeth before going to bed.
How Listerine Created Bad Breath - YouTube
Use some reading comprehension....it was referring only to their equity holdings. It stated that they hold most of their assets in commodities and futures.
Interesting, I received a email about Blackrock lowering the ETF Fees vs Vanguard today.
The wife is nervous. I told her to relax. Wait, don't react to this the HFT shit. MFWIRE.COM is a good morning email to receive. Don't forget BIS. Always start your morning off well.
Winks.
What in the fucking world are you talking about?!?
Let him go, he's on a roll.
Can't post images. No joke. I really do receive this information. Someone is piss off.
• Not FDIC Insured • No Bank Guarantee • May Lose Value
A Live Q&A with Russ Koesterich BlackRock Chief Investment StrategistEra Of Shattered Illusions - YouTube
I have Vanguard, Blackrock is offering lower transactions fees. Ask numbnuts above to Google link. We receive daily updates. Ask Squawkbox to report or the Bridgewater guy.
Funny. You ask for a link and when one is provided you deride it. I wish you and your wife the best in your intensive struggle choosing between Vanguard and Blackrock. I'm sure that decision will be the lynchpin between a successful retirement and eating dog food.
Does your idiocy know no bounds?
Not deridding Vanguard. I question Blackrock you silly fuck. You remind me of a retail person asking if I would like to purchase a store reward card.
Blackrock is defending its lower whore rates to move money. Not going to happen.
I never mentioned deriding Vanguard. Nor did I opine on Blackrock's defense of fees. Move the money or don't. I could not care less.
Reading your comments, I can only infer one of a few things:
You are drunk: In which case you can sober up and make more sensible conversation.
You are mentally deficient: Bipolar or whatever, in which case you can get help if you seek it. They are doing great theraputic things in this regard.
You are senile/alzheimers: If so I hope you have loved ones that will get you assistance as you fight your battle.
Meanwhile, keep making sure those whores from Blackrock don't steal your money.
You poor fuck. Guess you work on commission basis only. I don't have to work. Ask yourself why you have to work?
Savior getting up tomorrow morning. Think about me at 8:30 AM. You're getting your second cup of coffee or on hold with IT Department. I begin my day at 6:30 am. Your in a traffic jam. I don't give a fuck. Don't have to travel to a Hebrew slave job. But, you do.
Enjoy vvvvvvv
Aussie Insults - YouTube
?
Go to bed brooks. Clueless about the picture is obvious by question mark reply.
Sorry, I didn't open the picture/video. Your reliance on Youtube videos to give your rants credibilty speaks volumes as to your lack of credibilty. We've all established that whackjobs on Youtube should be our guiding light.
Still, the ? was because I had no idea what the fuck you were talking about.
"Savior getting up." What in the blue hell does that even mean.
Am I supposed to have a savior help me to get up?
Why do I need a hedge fund manager to buy ETFs for me?
Good question. I've made mistakes in trusting people with my money. I can't complain, my fault. Certainly, different companies have excelled. Blackrock is up to bullshit.
Just my opinion. I won't transfer any money out of that Vanguard account.
Good for you! Sticking with Vanguard will lock in your lifetime dreams. Blackrock is singling out you for the fucking. That's just how important you are.
Again, Bridgewater doesn't deal with retail-level clients. Their clients are large pension funds and sovereign wealth funds. If you are in charge of the sovereign wealth of your country, say Korea or Kuwait for example, you will likely want to use a US based fund advisor, one who has both an excellent track record and unimpeachable integrity. Dalio is a boy scout in a world filled with amoral sharks.
HA! So that Fund of Fund pansy circle-jerkers can blame someone else when they shit their drawers.
so his investors pay him 2 and 20 so he can pay etf managers their fee to buy the crappiest paper on earth? that's the gist of it?
That's pretty much the gist of it. But may I ask you a question (without trying to be a dick at all)? If you had figured this strategy about 20 years ago and now you could be a billionaire, would you have walked away on principle?
I agree that the portfolio is crap, but I can't find fault in a guy that maximized his financial position by creating a fund, or an illusion, that enriched him.
I always think that money is made or lost by one's ability to somehow separate the weak or stupid from their cash. It's always been that way and it always will.
I can't hate the winners nor feel sorry for the losers. It is how it is.
Get to bed Brook, you have to goto work in the morning. Take the snakeoil bullshit on the telemarketing phone calls tomorrow. You don't know my portfolio. Nor, net worth or how long, or what changes were made to maximize the account.
Tell your boss, he's a pussy pitching shit investment packages under lower fee transactions. Financial whorehouses are so 1987.
So you guys know each other?
Yes. If I may add that you only get RESPECT when you can seperate the monies from the People. So another icon (Dalio) stumbling, not a reason for cheers or tears just information on the outcomes of games.
That is a very progressive zero-sum outlook you have.
Most here on ZH probably would have walked away on principle (I should hope anyway).
Whatever happened to making/providing a good or service that provided value to the customer as a means of making a living? Not enough defrauding the stupid or weak for you?
Hence Ray's begging for QE4 a couple months back.
Here are some signs of a coming recession.
1. Business loans for M&A not CAPEX.
http://www.zerohedge.com/news/2015-10-15/there-goes-final-pillar-us-recovery-loan-growth-paradox-explained
2. Factory orders continue to drop
http://www.zerohedge.com/news/2015-10-02/us-factory-orders-flash-recession-warning-drop-yoy-10th-month-row
3. Default risk spikes
http://www.zerohedge.com/news/2015-10-02/us-financials-default-risk-spikes-2-year-high
4. M&A set record
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record/
5. Fed sees 2 bubbles
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
o Commercial Property higher than pre-2007 level.
http://nreionline.com/finance-investment/cre-prices-are-now-officially-above-pre-recession-peak
o Global Corporate Debt Market hits $5 trillion.
http://fn.dealogic.com/fn/DCMRank.htm
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
Booya