The Dalio Dynasty: Unraveling The Crown Jewels Of The World's Biggest Hedge Fund's Portfolio

Ray Dalio is the founder and former CEO of Bridgewater Associates, the world's largest hedge fund, with nearly $125 billion in total assets under management. With a net worth of over $15 billion, Dalio is one of the most successful investors of all time. He's known for his strategic bets navigating the markets during times of macroeconomic uncertainty. Dalio delivered a 9% profit during the 2008 financial crisis when stocks were down by nearly 37%. 

Dalio claims his success lies in timing the markets perfectly, as he often touts the importance of conducting proper macroeconomic research. 

"It’s impossible to separate economics from managing money. Doing economic research makes me a better trader," Dalio said. 

Take a look at some of Bridgewater's biggest holdings.

Proctor & Gamble Co.

Procter & Gamble Co. PG is one of the world's largest consumer staples companies with a market cap of over $347 billion. Given the increased market volatility amid speculation over delayed rate cuts, Proctor & Gamble stock could be an excellent defensive pick. Bridgewater Associates holds 4.8 million shares of Proctor & Gamble, which accounts for approximately 4.23% of its portfolio. 

Proctor & Gamble is also a dividend aristocrat as the company has raised its dividend payouts for 67 consecutive years. It currently pays $3.76 in dividends annually, yielding 2.55% on the current price. The company's financials have grown substantially over the past year with net sales increasing 6% year over year to $21.9 billion in the fiscal 2024 first quarter that ended Sept. 30. The company's earnings per share (EPS) increased 17% from the same period last year to $1.83. 

Both JPMorgan and Barclays have an Overweight rating on Proctor & Gamble stock. JPMorgan has a price target of $162, indicating a potential upside of nearly 10%. On the other hand, Barclays has a price target of $160, reflecting a potential upside of over 8%. 

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Coca-Cola Co.

Bridgewater Associates held 9 million shares of the Coca-Cola Co. KO as of Sept. 30. Approximately 3.04% of its portfolio is invested in Coca-Cola stock.

Coca-Cola stock has surged by 1.53% year to date, outperforming the S&P 500 index. The company's leading market share makes it well-positioned to weather an economic slowdown. Analysts expect Coca-Cola's EPS to rise at a compound annual growth rate (CAGR) of 6.2% over the next five years.

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The dividend aristocrat company allocated $5.3 billion toward dividends and share repurchases during the first nine months of 2023, magnifying shareholder returns. Barclays has an Overweight rating on Coca-Cola stock with a price target of $66, indicating a potential upside of over 10%. 

Costco Wholesale Corp.

Bridgewater Associates owns over 828,000 shares of Costco Wholesale Corp. COST, one of the largest retailers in the U.S. Costco is Bridgewater Associate's third-largest stock holding, accounting for 2.83% of its portfolio. 

Shares of Costco have risen by 5.29% this year, outperforming the Nasdaq Composite Index. The company has reported robust growth in its monthly sales, as its net sales for December rose 9.9% year over year to $26.15 billion. 

This trajectory is expected to continue, as analysts expect the company's revenue to rise 6.5% year over year to $58.83 billion in the fiscal 2024 second quarter ending in February. The consensus EPS estimate of $3.57 for the ongoing quarter indicates an 8.3% rise year over year. 

Costco is cracking down on membership sharing, which accounts for nearly 72% of the retailer's profits. This move could boost the retailer's profit margins significantly in the near term. 

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Photo courtesy: World Economic Forum On Flickr