Dalio’s Bridgewater Trims Stakes in Emerging Markets ETFs

May 15th, 2015 at 7:30am by Tom Lydon

Ray Dalio’s Bridgewater Associates, one of the world’s largest hedge funds, trimmed its exposure to emerging markets exchange traded funds during the first quarter while adding to stakes in ETFs that track U.S. equities.

“Bridgewater cut its investment the Vanguard FTSE Emerging Markets ETF by 4.21 million shares, leaving 112 million shares valued at $4.6 billion,” reports Kenneth Kohn for Bloomberg.

The Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO) is the largest emerging markets ETF by assets. VWO is still Bridgewater’s largest equity position, comprising 35.67% of the fund’s portfolio at the end of the first quarter, down from 37.12% at the end of last year, according to Whale Wisdom.

Bridgewater “added 1.05 million shares of the SPDR S&P 500 ETF and the value of its stake increased by $230.3 million to $3.4 billion as of March 31,” Bloomberg reported, citing the Securities and Exchange Commission.

Home to $177.6 billion in assets as of May 13, the SPDR S&P 500 ETF (NYSEArca: SPY) is the world’s largest ETF. SPY represented 26.4% of Bridgewater’s equity portfolio at the end of the first quarter, up from 25.2% at the end of 2014, according to Whale Wisdom. [Bridgewater Alters Some ETF Positions]

In addition to reducing its stake in VWO last quarter, Bridgewater did the same with the iShares MSCI Emerging Markets ETF (NYSEArca: EEM). EEM, the second-largest emerging markets ETF by assets, was 24% of the hedge fund’s portfolio at the end of March, down from 24.6% at the end of the fourth quarter.

Bridgewater did significantly increase its exposure to investment-grade corporate bonds last quarter, boosting its stake in the iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEArca: LQD) by 30%. The $21.8 billion LQD represents 0.53% of Bridgewater’s portfolio.

The hedge fund also owns shares of the $70.2 billion iShares Core S&P 500 ETF (NYSEArca: IVV). Bridgewater did not alter its IVV stake in the first quarter.

Vanguard FTSE Emerging Markets ETF



ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of EEM, LQD and SPY.

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