At the World Economic Forum in Davos, Switzerland, Ray Dalio made clear he believes that “cash is trash.” He elaborated:
“Of course cash is still trash. You know how fast you are losing buying power in cash? Equities are trashier.”
Instead, Dalio is focused on real assets. He explained:
“We’ve shifted into an environment where assets that do well, almost like in the 70s, are real assets. Real return assets in various ways are the best investments.”
Real assets are defined as tangible assets that derive their intrinsic value from their material or substance. Examples of real assets include commodities, real estate and land.
Despite his comments on equities, Dalio still owns billions of dollars of stocks through his hedge fund, Bridgewater Associates. The hedge fund has over $24 billion in managed 13F securities. However, it should be noted that the fund has total assets under management of $235 billion. This means that U.S. equities only account for about 10% of Bridgewater’s AUM.
With that in mind, let’s take a look at what Dalio is invested in.
Ray Dalio’s Top Stocks
Bridgewater operates as medium- to long-term investor that holds hundreds of stocks at a time. The average time that Bridgewater holds a stock in its portfolio is 4.2 quarters. However, for stocks in the fund’s top 10 positions, the average holding period is 13.4 quarters. Bridgewater’s top 10 holdings concentration is 33.94%.
The fund’s largest position is the Vanguard Emerging Markets (NYSEARCA:VWO) exchange-traded fund (ETF) with a 4.22% portfolio allocation. As the name suggests, the ETF focuses on companies in emerging markets. The largest holding in the ETF is Taiwan Semiconductor (NYSE:TSM), followed by Tencent (OTCMKTS:TCEHY).
Bridgewater’s second-largest position with a 4.2% portfolio allocation is Proctor & Gamble (NYSE:PG). The centuries-old consumer goods company has declined by about 11% year to date (YTD), outperforming the S&P 500’s YTD loss of 14%. Bridgewater purchased 1.63 million shares of PG stock during Q1, increasing its existing position by 31%.
Finally, the iShares Core MSCI Emerging Markets ETF (NYSEARCA:IEMG) is the fund’s third-largest holding with a 3.57% allocation. Like VWO, the iShares ETF is focused on emerging market opportunities. Its top two positions are also TSM and TCEHY. During Q1, Dalio purchased an additional 7.66 million shares of IEMG, nearly doubling his existing position.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
