Bridgewater Associates, one of the world's largest hedge funds, has significantly reduced its exposure to US-listed Chinese companies, according to its latest regulatory filings. The move comes as the global tech war intensifies and China's economic challenges deepen.
The hedge fund, which managed about $197 billion as of the end of March, started retreating from China in June last year. This strategic shift occurred as Bridgewater's returns diminished and the US Federal Reserve implemented tighter monetary policies, in contrast to China's easing efforts. Subsequently, the MSCI China Index experienced a 3% drop in the third quarter, while the Nasdaq Golden Dragon Index saw a modest gain of 1.6%.
In a detailed 13F filing released overnight in New York, Bridgewater revealed that by September 30, it had completely divested from 10 US-listed Chinese firms. The entities included notable names like XPeng (NYSE:XPEV), Li Auto (NASDAQ:LI), HutchMed, and BeiGene (NASDAQ:BGNE). Additionally, Bridgewater sold off all its holdings in prominent semiconductor companies TSMC and Micron (NASDAQ:MU).
The firm also scaled back its investments in a range of other companies such as electric vehicle maker Nio (NYSE:NIO), e-commerce platform PDD Holdings, financial services provider Lufax Holdings, restaurant company Yum China, hospitality operator H Group, and travel agency Trip.com.
Among the strategic changes was Bridgewater's withdrawal from Sea Ltd. (NYSE:SE), a Singapore-based e-commerce group that has been facing growth challenges and has been exiting unprofitable markets. This move aligns with a broader trend of global funds pulling back from Chinese markets; during China's housing slump, international investors withdrew $10.9 billion from China’s onshore market.
Ray Dalio, the founder of Bridgewater Associates, shared his insights on the evolving geopolitical landscape between Washington and Beijing. In a LinkedIn post, Dalio predicted that while military conflict might be less likely, an intense economic and technological confrontation is imminent.
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