TLDR
- Ray Dalio cut more than half of his SPDR S&P 500 ETF (SPY) holdings in Q1 2025, reducing it to 8.6% of Bridgewater’s portfolio
- The billionaire investor increased positions in gold through SPDR Gold Shares ETF (GLD) as a hedge against economic uncertainty
- Bridgewater expanded its Alibaba (BABA) stake despite the stock’s 42% year-to-date gains
- The moves came before Trump’s tariff announcements that caused market volatility and a Friday selloff
- Dalio’s strategy shifts from broad U.S. market exposure to targeted defensive and international plays
Ray Dalio’s Bridgewater Associates made major portfolio changes in the first quarter of 2025. The hedge fund cut more than half of its SPDR S&P 500 ETF (SPY) position while increasing bets on gold and Chinese technology stocks.
Bridgewater reduced its SPY holdings to just 8.6% of the total portfolio during Q1. The move came before Trump’s tariff announcements rattled markets and caused a sharp Friday selloff.
The timing appears strategic rather than reactive. Dalio’s fund scaled back broad U.S. market exposure just as volatility began to spike.
SPY remains Bridgewater’s largest holding by weight despite the reduction. The trimmed position suggests Dalio expects continued market turbulence ahead.
Dalio Increases Gold Exposure as Hedge
Bridgewater moved some of the SPY cash into gold investments. The fund increased its position in SPDR Gold Shares ETF (GLD) during the quarter.
Gold gained over 2% in a single session following the tariff announcements. The precious metal typically performs well during periods of economic uncertainty and inflation.
Dalio has long advocated for gold as part of diversified portfolios. He views it as protection against geopolitical risks and monetary policy changes.
The increased gold allocation reflects Bridgewater’s defensive positioning. The move prepares the portfolio for potential economic shocks.
China’s central bank has been cutting interest rates to support economic growth. This creates a more favorable environment for Chinese assets.
Alibaba Position Expanded Despite Strong Performance
Bridgewater also increased its Alibaba (BABA) stake during Q1 2025. This came even after the Chinese e-commerce giant gained 42% year-to-date.
Alibaba trades at a price-to-earnings ratio of 16.2 with a beta of 0.24. The low correlation to U.S. market volatility makes it attractive during uncertain times.
The company benefits from China’s improving economic backdrop. Rate cuts by Chinese authorities support domestic consumption and business investment.
Alibaba also has exposure to artificial intelligence and cloud computing growth. These sectors continue to expand rapidly in the Chinese market.
TipRanks rates Alibaba as a Strong Buy based on 12 analyst recommendations. The average 12-month price target of $166 implies 37% upside potential.
Rumors of a potential Apple partnership have also boosted investor interest. Chinese technology stocks have attracted more international investment recently.
Dalio’s portfolio changes reflect a shift toward tactical positioning over passive index investing. The moves prioritize specific opportunities over broad market exposure during a period of increased economic uncertainty.
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