The Billionaire Ray Dalio’s 9 Best Stock and ETF Selections

At $126.4 billion in assets, Bridgewater Associates, run by Ray Dalio, is the biggest hedge fund in the world. According to Forbes, Dalio has almost a $19 billion net worth. In 2020’s erratic market fluctuations, Bridgewater’s well-known Pure Alpha II fund underperformed and ended the year with a 12.6% loss. While the market was poor in 2022, Dalio and the Pure Alpha II fund beat it, recording an outstanding 6% return up until early December.

These are Bridgewater’s top nine stock and fund positions, according to its most recent 13F filings, with a potentially more decisive year in 2023:

iShares Core S&P 500 ETF (IVV)

The IVV S&P 500 marketplace fund, or ETF, from iShares, is Dalio’s most prominent investment, which is excellent news for investors worried about the forecast for the stock market in 2023. In other words, Dalio is placing his bets that the U.S. stock market will recover from its 2022 lows and that the country’s economy will avert a protracted or severe recession. Due to the market capitalization-based weighting of the S&P 500, Google Inc., Microsoft Corp., and Apple Inc. are among its top holdings (GOOG, GOOGL). Around 4.3% of Bridgewater’s whole portfolio, or more than 2 million shares, are held in the IVV ETF, valued at $793.2 million.

Procter & Gamble Co. (P.G.)

Blue-chip consumer goods business Procter & Gamble is the proprietor of well-known brands like Pampers, Tide, and Bounty. Also, it is Bridgewater’s single-largest stock investment. Through February 16, P.G. shares had a year-to-date total return of 8.9% lower than the S&P 500, underperforming the index thus far in 2023. During difficult market times, consumer staples companies such as Procter & Gamble are often seen as safe defensive investments. In the fourth quarter, Procter reported a 6.9% decline in net earnings and a 0.9% decline in revenue. About 5 million units of P.G. stock, worth $757.1 million, are held by Bridgewater.

iShares Core MSCI Emerging Markets ETF

iShares Core MSCI Emerging Markets ETF In 2022, it appeared that Dalio would be unable to defend some of his most significant Chinese assets because of the risks connected with U.S. and Chinese governmental crackdowns and attempts to delist Chinese firms. Bridgewater sold its holdings in the Chinese companies NetEase Inc., JD.com Inc., Bilibili Inc., and Alibaba Group Holding Ltd. last year (NTES). In contrast, Dalio is approaching China through a more diversified strategy using the IEMG fund, an emerging market ETF with only about 28% exposure to China. Bridgewater currently owns more than 14.5 million units of the IEMG fund worth around $679.6 million after selling 347,293 stocks in the fourth quarter.

Johnson & Johnson

A leading manufacturer of pharmaceutical and healthcare products worldwide is Johnson & Johnson. During the first quarter of 2020, during the initial COVID-19 epidemic in the US, Dalio began accumulating shares of Johnson & Johnson. Despite a 4.4% fall in sales in the fourth quarter, Johnson & Johnson’s plans to spin off its consumer division into a newly listed corporation in 2023 may be a positive stimulus. Bridgewater dramatically reduced its exposure to Johnson & Johnson in the fourth quarter by selling more than 1.14 million shares. However, the company still has 3.56 million JNJ shares worth over $630 million.

PepsiCo Inc.

PepsiCo Inc. is a well-known consumer staples stock that makes a tremendous defensive investment in a volatile market. PepsiCo shares, like other defensive companies, have underperformed the S&P 500 in 2023, with a year-to-date total loss of 2.9% as of February 16. PepsiCo reported a 10.9% revenue increase and $518 million in net profits for the fourth quarter. Since the first quarter of 2020, Dalio has owned PepsiCo shares, but in the fourth quarter, he decreased his holding by nearly 24%. Over 3.02 million PEP shares, valued at more than $545.6 million, are still held by Bridgewater.

Vanguard FTSE Emerging Markets ETF

Another well-known ETF is the Vanguard FTSE Emerging Markets Market Index Fund ETF. To diversify his fund’s investment in emerging market economies like China, Taiwan, and Brazil, Dalio uses VWO. Given that approximately 44% of the VWO fund’s assets are Chinese and Taiwanese firms, it is highly vulnerable to geopolitical concerns. Still, it may profit from the relaxation of China’s COVID-19 limitations in 2023. Bridgewater still has 13.8 million worth of shares, around $539 million, despite selling nearly 6% of its VWO fund holdings in the fourth quarter.

Coca-Cola Co.

Coca-Cola Co. Dalio places only some of his eggs in a single basket. He also has a sizeable investment in PepsiCo’s rival Coca-Cola, which ranks among the fund’s top holdings. Sadly, K.O. shares have yet to keep up with PepsiCo shares thus far in 2023. Coca-Cola reported a 7% increase in revenue for the fourth quarter but a 1% decline in worldwide unit case volume. Dalio joins fellow billionaire and CEO of Berkshire Hathaway Inc. (BRK.A, BRK.B) Warren Buffett in owning Coca-Cola over a lengthy period. Bridgewater now owns around 8.4 million K.O. shares valued at more than $535.6 million.

SPDR S&P 500 ETF Trust

Similar to the IVV fund in terms of the S&P 500 index, the SPDR S&P 500 ETF Trust is indeed a State Street-issued S&P 500 fund. The fund follows the S&P 500 and has a low-cost ratio of 0.09%. It also has plenty of liquidity. The SPY and IVV ETFs are the only ones Dalio holds, and he likely only does so to hedge his exposures to the S&P 500. With the sale of 89,318 shares in the final quarter, Dalio decreased his holdings in SPY by 6%. Bridgewater now holds 1.37 million SPY fund shares, valued at $525.5 million.

Walmart Inc. (WMT)

One of the top bargain merchants is Walmart. Despite issues with inventory control and interruptions in the supply chain, Walmart’s operations and stock have done rather well over the previous year. In the most recent quarter, Walmart recorded 8.7% sales growth and 8.2% same-store revenue growth in the United States. Moreover, worldwide advertising income increased by 30% last quarter, while internet sales increased by 16%. Although Dalio has investments in rival bargain retailers Target Corp. (TGT) and Costco Wholesale Corp., Walmart is his biggest bet on this industry (COST). 3.4 million units of WMT stock, valued at more than $482 million, are now held by Bridgewater.