Bridgewater Associates’ flagship macro fund, Pure Alpha, achieved an 8.2% gain in January, navigating a volatile month marked by a sell-off in AI-related stocks and uncertainty surrounding the incoming US administration, according to a report by Reuters.
The report cites an unnamed source familiar with the performance as highlighting that while the drivers behind the fund’s January gains were not immediately clear, the performance builds on a strong 11.3% return from Bridgewater’s Pure Alpha 18% volatility strategy in the previous year.
Tech stocks faced significant pressure in January, particularly after Chinese AI startup DeepSeek unveiled an artificial intelligence model that rivalled US industry leaders at a fraction of the cost. The announcement sent Nvidia shares tumbling 17% on 28 January, contributing to broader market turbulence.
Simultaneously, concerns mounted after US President Donald Trump proposed tariffs on Canada, Mexico, and China. While the threat of tariffs on Canada and Mexico was suspended by the end of the month, tariffs on China remained in place, adding to market uncertainty.
Despite these headwinds, US equities ended January in positive territory, with the S&P 500 up 2.7%, the Nasdaq Composite seeing a 1.64% gain, and the Dow Jones Industrial Average climbing 4.7%.
At a Miami conference last week, Karen Karniol-Tambour, Bridgewater’s Co-Chief Investment Officer, recommended investors diversify their equity holdings geographically and increase bond allocations to safeguard portfolios against potential growth slowdowns.
“The bar for US equities to continue outperforming has risen significantly after this extended period of dominance,” Karniol-Tambour remarked, pointing to the heightened risks in relying solely on US markets for returns.
