Bridgewater Reduces S&P 500 Exposure by 33% Boosts Gold Holdings by 33% and Alibaba by 3000%

Bridgewater Associates, the world's largest hedge fund managed by billionaire Ray Dalio, has made significant adjustments to its portfolio. The firm has reduced its exposure to the S&P 500, as evidenced by a decrease in its stake in the SPDR S&P 500 ETF. This fund, which tracks the performance of the S&P 500, now constitutes approximately 8.5% of Bridgewater's overall portfolio as of the end of March.

Concurrently, Bridgewater has increased its holdings in the SPDR Gold Shares ETF (GLD), an exchange-traded fund that mirrors the price of gold bullion minus expenses. The hedge fund boosted its GLD holdings by about 33%, allocating around $340 million to the precious metal. This strategic move aligns with Dalio's repeated warnings about the potential decline of the US dollar, which he believes could lead to stagflation—a scenario characterized by high inflation, high unemployment, and low economic growth.

However, Bridgewater's portfolio adjustments are not solely defensive. In addition to its increased gold holdings, the firm has substantially boosted its position in Alibaba, the Chinese e-commerce giant. Bridgewater's Alibaba holdings surged by over 3,000%, resulting in ownership of 5,660,258 shares valued at approximately $680 million. This makes Alibaba one of Bridgewater's top holdings. Alibaba's stock has appreciated by about 42% year-to-date, driven by robust growth in its cloud computing segment.

Bridgewater's portfolio reallocation reflects a balanced approach, combining defensive strategies with offensive investments. The firm's increased exposure to gold serves as a hedge against potential economic downturns, while its significant investment in Alibaba capitalizes on the growth opportunities presented by the tech sector. This dual strategy underscores Bridgewater's proactive management style, aiming to navigate market uncertainties while seizing profitable opportunities.