Ray Dalio’s Bridgewater Associates, one of the world’s largest hedge funds, did some minor tinkering to its positions in exchange traded funds during the fourth quarter.
Bridgewater pared its stake in the SPDR S&P 500 ETF (NYSEArca: SPY), the world’s largest ETF, by 1.91 million shares during the fourth quarter, bring its SPY position to “15.4 million shares valued at $3.16 billion. The value of the holding was reduced by $245.9 million, the biggest decrease among existing stakes,” according to Bloomberg.
SPY is still Bridgewater’s second-largest equity position behind the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO). Bridgewater added to its position in VWO, the largest emerging markets ETF by assets, during the fourth quarter.
Bridgewater’s VWO stake at the end of 2014 was 116.2 million shares valued at over $4.6 billion. That is an increase of 5.32 million shares from the third quarter, meaning VWO represented 37.1% of Bridgewater’s equity portfolio at the end of 2014, up from 36% at the end of the third quarter. [Hedge Fund Love These ETFs]
While boosting its VWO exposure, Bridgewater pared its position in VWO’s chief rival, the iShares MSCI Emerging Markets ETF (NYSEArca: EEM). Bridgewater sold 1.52 million EEM shares during the fourth quarter, bringing its stake in the second-largest emerging markets ETF to 78.5 million shares, or 24.6% of the firm’s equity portfolio.
EEM has lost nearly $970 million in assets this year as investors, including institutions, opt for lower cost and minimum volatility fare, such as the iShares Core MSCI Emerging Markets ETF (NYSEArca: IEMG) and the iShares MSCI Emerging Markets Minimum Volatility ETF (NYSEArca: EEMV). [Popular EM ETF Shrinks]
Bridgewater made no changes to its positions in the iShares Core S&P 500 ETF (NYSEArca: IVV) and the iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEArca: LQD). IVV and LQD represented 0.29% and 0.4%, respectively, of Bridgewater’s equity portfolio at the end of the fourth quarter.
Vanguard FTSE Emerging Markets ETF
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of EEM, IVV, LQD and SPY.