Bridgewater steps back from China as biggest hedge fund slashes stock bets for 7th quarter

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The US hedge fund’s holdings of Chinese stocks listed in the US have declined by 80 per cent in value since September 2022, according to filings

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An electronic ticker displays stock figures in Shanghai on August 7, 2024. Photo: Bloomberg

Jiaxing Li

Published: 5:00pm, 16 Aug 2024Updated: 5:52pm, 16 Aug 2024

Bridgewater Associates sold more US-listed Chinese stocks from its global portfolio last quarter as returns sagged, bringing its retreat from some of the mainland’s underperforming companies to about 80 per cent over the past two years.

The US investor cut all its stakes in social-media platform operators Weibo and Joyy, as well as solar-panel maker Daqo New Energy, during the three months to June 30, according to its latest 13F filing in New York on Thursday.

The world’s biggest hedge fund, founded by billionaire China bull Ray Dalio, also slashed its holdings in car maker Li Auto, KFC and PizzaHut restaurant chain operator Yum China, as well as online travel agency Trip.com, by as much as 45 per cent, the filing showed.

The retreat shows how far Chinese stocks have gone out of favour as peers in the US and other emerging markets rallied. MSCI China, the broadest gauge of Chinese stocks, rose 1.7 per cent over the past seven quarters, while benchmark indices in the US, Japan and India surged by 34 to 52 per cent, according to Bloomberg data.

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Why investors can expect more market volatility after recent global stock sell-off

China’s gross domestic product grew at an annual pace of 4.7 per cent last quarter, easing from 5.3 per cent in the preceding three months. A prolonged property market slump and price deflation have dogged the economy in the post-Covid years, adding to geopolitical tensions in the region and with the US.

In total, the number of companies in Bridgewater’s global stock portfolio jumped to 877 from 677, valued at US$19.2 billion, according to the 13F filing. They included 14 Chinese companies, whose market value shrank by 14.5 per cent last quarter to US$266 million.