How Ray Dalio Solidified Bridgewater's Position As The Top Hedge Fund In China

Ray Dalio's hedge fund, Bridgewater Associates, continues to make big bets on China, despite the country's not-so-cordial relationship with the U.S.

According to Reuters, Bridgewater's assets in China for 2022 totaled 20 billion yuan ($2.95 billion) — about double what it had in 2021.

This solidified the firm's position as the biggest hedge fund in the country.

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Dalio maintains that the country’s long-term prospects is bright, despite mounting uncertainties (i.e., the debt crisis, real estate, COVID-19 situation, demographics and confusion surrounding the common prosperity goal).

Bridgewater launched its first onshore China fund in 2018. Since then, it unseated Winton and Man Group as China's biggest foreign hedge fund.

Dalio, Returns Reasons Behind Success: Dalio’s firm has found success in the $10-trillion asset management market with its “all-weather strategy," the report said.

An all-weather fund tends to perform well and give reasonable returns irrespective of the market condition. Incidentally, the term “all-weather fund” is coined by Dalio himself.

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Bridgewater’s first China fund had an annualized return of 15.6% in 2022, markedly higher than the 3.7% return for the CSI 300 Index and 5% for the Chinese treasuries, Reuters noted. The CSI 300 Index is a market-cap-weighted stock market index that replicates the performance of the top 300 stocks traded on the Shanghai and Shenzhen markets.

Another fund launched in December 2021 reportedly netted a return of 8.4% in 2022.

Apart from the stronger returns, Bridgewater’s strong showing in China is also attributed to Dalio’s long-standing connections with the country and his understanding of the domestic cycles, the report said.

The iShares MSCI China ETF MCHI closed Monday's session rose 0.36% to $52.45, according to Benzinga Pro data.

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