Bridgewater Associates, one of the world’s largest hedge funds, is teaming up with State Street Global Advisors (SSGA) to bring its investment strategies to retail investors, marking a significant shift in its approach to the market, according to a report by the Financial Times.
The partnership, unveiled on Tuesday, will begin with the launch of an exchange-traded fund (ETF) that mirrors Bridgewater’s renowned “All Weather” strategy. This ETF aims to perform in various market conditions by diversifying across a broad range of asset classes.
State Street has submitted regulatory filings with the US Securities and Exchange Commission (SEC) for the “All-Weather” ETF, which will be managed by Bridgewater using its proprietary risk parity methodology. This approach leverages assets based on their expected volatility to achieve balanced portfolio risk.
If approved, the ETF will offer retail investors a rare glimpse into Bridgewater’s historically exclusive and secretive investment strategies.
The collaboration also encompasses a broader initiative between Bridgewater and State Street to expand access to sophisticated financial products, including hedge funds, private equity, and credit strategies.
This partnership reflects a growing trend among traditional asset managers and alternative investment firms to target wealthy individual investors. With institutional clients increasingly cautious about complex investments, both groups see high-net-worth individuals and retail investors as a fertile market.
State Street and Bridgewater’s move mirrors recent collaborations such as those between Capital Group and KKR, BlackRock and Partners Group, and an existing partnership between SSGA and Apollo. These deals also align with retail investors’ growing appetite for higher-yield, fee-generating products like hedge funds and private credit.
Founded by Ray Dalio, Bridgewater has faced challenges in recent years, including succession turmoil, sub-par fund performance, and client outflows. At the end of August, the firm’s assets under management stood at $100bn, down from a peak of $160bn. Its flagship Pure Alpha fund experienced significant losses in both 2022 and 2023.
Known for its low-cost passive funds, SSGA is pushing into higher-risk, higher-reward investment vehicles. With $4.7tn under management, the firm has launched more than 80 ETFs this year, including products focused on digital assets and private credit in collaboration with Apollo.
