Bridgewater's Pure Alpha II, All Weather Funds Gain In First Quarter of 2017

Apr 6 2017 | 8:16pm ET

The flagship macro fund at Ray Dalio’s Bridgewater Associates reportedly booked solid performance in the first quarter of 2017, extended gains from last year and further illustrating the budding renaissance that seems to be underway in the macro fund space.

The company’s Pure Alpha II fund is up 2.3% so far this year through March, according to a Bloomberg article citing unidentified individuals familiar with the results, while a lower-volatility version is up 1.6%. The fund gained 2.4% in 2016, the article noted. 

Macro funds have faced tough headwinds for much of the past two years leading up to last year’s fourth quarter, as rock-bottom interest rates, minimal inflation and high correlations between asset classes made it difficult for managers to generate consistent returns. Macro funds typically bet on long-term economic trends through positions in global equity, bond, currency and commodity markets. It was the worst performing strategy among hedge funds last year, Bloomberg reported. 

For example, Dalio’s flagship All-Weather Fund, which as a risk-parity vehicle is long-only and doesn’t hedge its portfolio, lost 7% in 2015 but gained 11.6% in 2016 largely due to the tremendous volatility in equity, bond and currency markets that followed the U.S. presidential election. For the year to date, it’s up around 3.6%, Bloomberg continued. 

Founded in 1975 in a two-room apartment, Westport, CT-based Bridgewater is the world’s largest hedge fund manager, responsible for around $160 billion in assets for institutional investors, foreign governments, central banks, corporate and public pension funds, university endowments and charitable foundations.

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