World’s Largest Hedge Fund Ramps up Investments in Gold

In the second quarter of 2020

Photo: Steve Bidmead / Pixabay

The world’s largest hedge fund, Bridgewater Associates (founded by billionaire Ray Dalio), increased its investment share in gold ETFs in the second quarter. This is evidenced by data from the US Securities and Exchange Commission (SEC).

As we remind you, an ETF (Exchange Traded Fund) is an investment fund whose shares are stock-traded. Its stock pricing follows the same dynamic as a portfolio which may include stocks, commodity futures, currencies, bonds and other assets. Shares in so-called gold ETFs follow the movement of the market price for gold.

Gold prices in 2020 have been rising amid the coronavirus pandemic. In general, this year the asset has increased in price by about 30%.

In April through June, Bridgewater Associates increased its positions in the SPDR Gold Shares ETF and iShares Gold Trust. According to Reuters estimates, the shares acquired by the fund are equivalent to 170,000 ounces of gold for $340 million.

In the second quarter, the fund fully exited or decreased its positions in emerging market ETFs and Canadian banks.

Top five positions which Bridgewater Associates has exited, according to Bloomberg:

  • iShares Barclays 20+ year Treasury Bond ETF (TLT) – $279.1 million;
  • iShares iBoxx High Yield Corporate Bond ETF (HYG) – $115.2 million;
  • iShares JPMorgan USD Emerging Markets Bond ETF (EMB) – $78.6 million;
  • Royal Bank of Canada (RY) – $28.6 million;
  • Toronto-Dominion Bank (TD) – $25.1 million.

The fund also reduced its positions in a number of ETFs: iShares MSCI Brazil Index (EWZ), iShares TR/MSCI India ETF (INDA), iShares MSCI South Korea Index Fund (EWY) and iShares MSCI Emerging Markets Index (EEM).

The fund has grown its positions in the Chinese Alibaba Group (BABA), JD.Com Inc (JD), Pinduoduo (PDD) and several ETFs: SPDR S&P 500 (SPY), iShares China Large-Cap (FXI) and Vanguard FTSE Developed Markets (VAA). 

New acquisitions by Bridgewater Associates include shares in the US logistics company UPS, the railroad company CSX, the Chinese pharmaceutical company Zai Lab (ZLAB), water and sanitary services provider Ecolab (ECL) and several US industrial enterprises.



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