1. On Wall Street, Bridgewater Associates is a trendsetter.
According to the company’s Form ADV dated October 10, 2022, Bridgewater Associates, established by Wall Street icon Ray Dalio, is one of the most well-known hedge funds in the world with $235.5 billion in assets overall. In contrast to the Dow Jones Industrial Average, which is down 7.7% as of November 16, Bridgewater’s flagship Pure Alpha II fund has performed well for Dalio this year, up 22% year to date. Although he stated he was stepping down as Bridgewater’s CEO, Dalio will continue to be an active investor. Despite this, the hedge fund still commands a lot of respect on Wall Street, and all eyes are on his every investment decision. What’s new with Dalio and Bridgewater’s most recent Form 13F report from the U.S. Securities and Exchange Commission? Here is an image.
2. Co. Procter & Gamble (ticker: PG)
In the third quarter, Bridgewater reduced its holdings in the well-known manufacturer of consumer products, reducing its PG stake by 131,715 shares. The stock of P&G, which owns well-known household names including Pampers, Tide, and Bounty, has down 5.5% over the previous three months and is down 11.2% year to date as of November 16. On October 19, P&G released the results of its most recent quarter, exceeding expectations with core profits per share of $1.57 and revenues that increased by 1.3% to $20.6 billion, above the analyst average of $20.3 billion. During times of market turbulence and uncertainty, consumer staples companies like Procter & Gamble are seen to be good defensive investments. 6.6 million shares of PG stock, worth around $835 million, are now held by Bridgewater.
3. Smith & Johnson (JNJ)
The renowned multinational manufacturer of pharmaceutical and healthcare products has been a consistent investment for Bridgewater in recent years. In the first quarter of 2020, during the first COVID-19 epidemic in the US, Dalio began accumulating shares of Johnson & Johnson. J&J’s revenue growth slowed as the epidemic subsided and Americans reduced their use of COVID-19 vaccinations. J&J witnessed a 1.9% gain in quarterly sales over year-ago levels as of September 30, 2022. A positive trigger was thought to be J&J’s intention to split off its consumer division into a fresh public company by the end of 2023. This optimistic anticipation hasn’t materialized in a strong stock price, as the JNJ stock has only increased by a modest 1.4% this year as of November 16. 4.7 million shares of JNJ stock, worth $769.8 million, are now held by Bridgewater. Comparatively, 4.3 million shares were traded in the second quarter.
4. Inc. PepsiCo (PEP)
For two of the biggest beverage and consumer goods firms in the world, PepsiCo and Coca-Cola Co., Dalio seldom puts all of his eggs in one basket (KO). Similar to Coca-Cola, PEP’s stock price has recently fallen. The stock has down 1.1% over the last three months, but it has recovered by 4.8% over the past 30 days, which is a pleasant development in an otherwise sluggish stock market. PEP has increased overall by 2.7% year-to-date as of November 16. However, things could be improving. PepsiCo reported 8.8% sales growth and $2.7 billion in net profits in the most recent quarter. Approximately 4 million PEP shares, worth $656.5 million, are held by Bridgewater.
5. Coke Company (KO)
Coca-Cola is another high-quality consumer staples company that makes a great defensive investment in a challenging market. Coca-Cola shares had shown resilient to mid-2022, but during the last three months, the share price fell 6.3%, resulting in a year-to-date total return of 4.5% as of November 16 (it was 10% through Aug. 23). Coca-Cola recently announced a 10% increase in net sales and $2.8 billion in net profits, both improvements above Q2. Warren Buffett, a fellow billionaire and the CEO of Berkshire Hathaway Inc. (BRK.A, BRK.B), has also made Coca-Cola one of his top long-term holdings, placing Dalio in excellent company. Bridgewater now owns around 11.47 million KO shares, valued at $642 million.
6. Core MSCI Emerging Markets ETF from iShares (IEMG)
In the third quarter, Dalio reduced Bridgewater’s holding in IEMG by selling 408,000 shares. The decision by Bridgewater to withdraw from some of its Chinese assets is a continuation of a trend that began to pick up steam in the second quarter. The shares of the Chinese companies NetEase Inc., JD.com Inc., Bilibili Inc., and Alibaba Group Holding Ltd. were all sold by Dalio, who also liquidated some of his bigger investments in the Chinese market (NTES). Only approximately 25% of the emerging markets exchange-traded fund, or ETF, IEMG, is exposed to China. Bridgewater’s holding in IEMG now stands at roughly $640 million, down from $751 million in the second quarter. Bridgewater currently controls 14.9 million shares of the fund, down from 15.3 million in Q2.
7. Core S&P 500 ETF from iShares (IVV)
The low-turnover, respectable dividend-paying S&P fund that follows the S&P 500 is called the iShares Core S&P 500 ETF. The SPDR S&P 500 ETF Trust (SPY), another benchmarked stock market index, and this ETF provide Dalio two substantial stock ETFs that allow him to diversify his exposure to the S&P 500. After increasing his investment in IVV by 51% in the second quarter, Dalio essentially maintained his position in IVV in the third quarter, acquiring 61,000 shares, a 3% quarterly gain. Currently worth $631 million, Bridgewater holds 1.76 million shares of the IVV fund.
8. Wholesaler Costco Inc. (COST)
In the first half of 2022, Costco, a huge membership warehouse retailer, seemed to be repaying Dalio for his belief in the big-box consumer market. Bridgewater reduced some of its COST allocations in the most recent quarter as the retailer succumbed to the same weaker consumer sentiment that most retailers will experience in 2022. COST stock has dropped 5.2% over the past three months (but has increased 15.3% over the past month heading into the holiday season). However, Costco reported a 10.8% increase in same-store sales for the fiscal third quarter in May. In the week ending September 30, Dalio sold 11,554 shares from Bridgewater’s holding in COST. The company now owns about 1.2 million shares of COST stock, valued at $566.5 million.
9. Emerging Markets Stock Index Fund from Vanguard (VWO)
Another well-known fund that invests in companies from developing markets is the Vanguard Emerging Markets Stock Index Fund, an ETF. VWO is a method for Dalio to diversify his fund’s bet on emerging-market economies like China, Taiwan, and Brazil, much as IVV complements SPY in Bridgewater’s portfolio. Geopolitical risk exposure for VWO is particularly high in East Asia. In the fund, equities from China and Taiwan account for around 40% of the total holdings. In the third quarter, Bridgewater continues to sell off its shares of VWO, selling 667,600 of them, although the company still owns 14.8 million shares worth $539 million.
10. Wholesaler Costco Inc. (COST)
In the first half of 2022, Costco, a huge membership warehouse retailer, seemed to be repaying Dalio for his belief in the big-box consumer market. Bridgewater reduced some of its COST allocations in the most recent quarter as the retailer succumbed to the same weaker consumer sentiment that most retailers will experience in 2022. COST stock has dropped 5.2% over the past three months (but has increased 15.3% over the past month heading into the holiday season). However, Costco reported a 10.8% increase in same-store sales for the fiscal third quarter in May. In the week ending September 30, Dalio sold 11,554 shares from Bridgewater’s holding in COST. The company now owns about 1.2 million shares of COST stock, valued at $566.5 million.
11. Amazon.com Inc. (WMT)
While rival retail goliaths have recently fallen into the red, Walmart has remained steadfast. WMT has increased by 13.9% over the last month and 6.6% over the previous three months as of Nov. 16; this suggests that it will continue to grow over the Christmas season. Because consumers in both strong and weak economies are drawn to Walmart’s cheap prices and steep discounts, the company often succeeds well in difficult times. Even while inflation continues to annoy Main Street customers, the corporation produced solid third-quarter profitability and stepped up with a projected $20 billion repurchase program. Dalio does not see WMT’s tenacity as a buy signal. Contrary to popular belief, Bridgewater actually sold 668,000 shares in the most recent quarter, leaving around 4 million shares with a $523 million market value per share.
12. Trust for SPDR S&P 500 ETF (SPY)
In the third quarter, Dalio sold 380,000 shares of SPY, lowering the fund’s holdings percentage from 2.95% to 2.65%. Does this suggest that Dalio is reversing his prediction that the U.S. stock market would return strongly despite high inflation and increasing interest rates? No and yes. Apple Inc. (AAPL), Microsoft Corp. (MSFT), and Amazon.com Inc. (AMZN), which are the firms Dalio believes in and wants to segregate a substantial portion of Bridgewater’s fund portfolio to accommodate, are among the top holdings of the S&P 500, which is weighted by market capitalization. But if necessary, Dalio will sell off SPY holdings. In Q2, Bridgewater had more than 1.8 million SPY ETF shares, but in Q3, it reduced that number to 1.5 million, valued at nearly $523 million.
10 top stocks and exchange-traded funds owned by billionaire Ray Dalio:
13. Johnson & Johnson, Procter & Gamble Co. (JNJ)
- Inc. PepsiCo (PEP)
- Coke Company (KO)
- Core MSCI Emerging Markets ETF from iShares (IEMG)
- Core S&P 500 ETF from iShares (IVV)
- Wholesaler Costco Inc. (COST)
- Emerging Markets Stock Index Fund from Vanguard (VWO)
- Trust for the Walmart Inc. (WMT) SPDR S&P 500 ETF (SPY)
