Bridgewater Associates, the world’s largest hedge fund, has continued its significant reduction in exposure to Chinese stocks, selling off US-listed Chinese holdings for the seventh quarter running in Q2 2024, according to a report by the South China Morning Post.
The resort cites the company’s latest 13F filing as revealing that the firm, known for founder Ray Dalio’s bullish stance on China, has now reduced its holdings in some of China’s underperforming companies by approximately 80% over the past two years.
During the three months ending 30 June, Bridgewater completely exited its positions in several Chinese companies, including social-media platforms Weibo and Joyy, and solar-panel maker Daqo New Energy. The firm also significantly trimmed its stakes in other major Chinese firms, such as Li Auto, Yum China (the operator of KFC and Pizza Hut), and online travel agency Trip.com, by up to 45%.
Over the past seven quarters, the MSCI China Index, which represents the broadest measure of Chinese stocks, has only risen by 1.7%. In contrast, benchmark indices in the US, Japan, and India have surged by 34% to 52%.
Bridgewater’s global stock portfolio now includes 877 companies, up from 677 in the previous quarter, with a total value of $19.2bn. However, the value of its 14 remaining Chinese holdings shrank by 14.5% last quarter to $266m. Since the third quarter of 2022, Bridgewater has slashed its holdings in U.S.-listed Chinese stocks by 80%.
In addition to reducing its direct stock holdings, Bridgewater also cut its stakes in China-focused exchange-traded funds (ETFs) last quarter, trimming its positions in the iShares China Large-Cap ETF by 11% and the iShares MSCI China ETF by 10%.
Bridgewater is not alone in its retreat from China. Singapore-based Fenghe Fund Management, co-founded by Alibaba Group Holding’s chief technology officer, also made significant cuts last quarter, exiting positions in TAL Education, Alibaba Group, and Yum China, according to its 13F filings.
