Ray Dalio Bridgewater Performance

He’s tipping us about: A portfolio that is market neutral :grinning:… basically low correlation to the entire market/wider economy.

When you’re just starting with small portfolio it’s usually expensive to do the above with traditional brokers. With Freetrade it’ll be cheap!


I saw this news earlier today. 14.6%!

Its funny, early on in 2018 there were people criticising Ray Dalio’s returns relative to the S&P500 and other indexes. His ‘Allweather’ portfolio I guess has shown has powerful it can be, even when seemingly every index is incurring losses! Its a portfolio built to do well under all economic circumstances.

The comment he makes about portfolios being unbalanced is particularly interesting. You’re right, lucky we have Freetrade to edge into the markets slowly, with smaller positions :muscle:


I’ve no idea what the industry’s terms of art for these things are but the term “market neutral” portfolio sounds like something that should deliver the market’s performance, rather than something that manages to hedge against it. I suppose “market indifferent” makes more sense to me as a term. (Though how you achieve that is another question and to my naive mind eventually leads you back to something that looks very mundane and easy, like the traditional 60/40 index/bond portfolio or whatever.) Anyway.

Balancing/hedging your portfolio and income seems a very sensible idea. Evaluate and adjust risk across your life, not just your portfolio. If you work at a startup, consider taking a bit less risk in your pension fund, and so on.

Here’s some more coverage about this for FT subscribers -

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I set up another page for people to vote on three specific Aggregate Bond ETFs. We already have a Clean Energy ETF so until ESG ratings develop further I think we have that covered.

The UK, Europe, the US, China, Japan, Hong, Kong, Singapore, Australia and New Zealand are already well covered by ETFs on Freetrade.

It would be awesome if ETFs would be brought on to cover Russia, India, Brazil, Africa (I know it is a continent but I feel the Africa 50 would do a good enough job for now) and Mexico.

I think a few people on Freetrade have also read about Ray Dalio’s all weather index. We already have the ‘Vanguard All Share Market ETF’ and a gold ETF.

All that is missing is a longer dated global bond ETF (20 years +) and a specific medium global bond ETF (5 years +) as well as a commodity ETF (ICOM).

I feel like these would really begin to open up the investing world beyond the US, the UK and parts of Asia.


Good! I think it’s a really valid strategy and that a lot of people on here would like to make use of it!

I’ve heard of the all weather fund but have spent no time researching it.

Can someone give me a quick summarised run down?

Sure… so essentially Ray Dalio has founded a trust with billions of dollars. He realised he would not be around to run it so designed a portfolio which would perform in any of the big four scenarios:

  • High growth, high inflation
  • Low growth, high inflation
  • High growth, low inflation
  • Low growth, low inflation

It used a 30% equities exposure, 7.5% gold exposure, 7.5% commodities exposure and the rest is comprised of medium and long term bonds. The portfolio is designed to return 5% per annum under any conditions with fewer years of falls. It has been thoroughly backtested.


What is it’s performance like when compared against just buying a global tracker or just buying the S&P 500?

Off the top of my head, being so bond heavy would be a drag on returns if interest rates were to rise?

By definition you are taking on less risk and therefore you would expect your returns to be lower. The point of this portfolio is not to outperform the S&P500 but to actually perform (i.e. still make money) under any market condition.

Being bond heavy can be a drag but can also not (bond funds are up 10% this year with much less risk than shares). We should not be so concerned with absolute performance but with performance relative to the risk taken. To have all of your money in shares can lead to a 50-60% fall which can take half a decade to recover from. The aim of this fund is to avoid that as even a 50% fall in equities only results in a 15% fall in the portfolio.

Which page has these ETF’s you need votes on ?

Hi mate - really appreciate the support! Below are the two pages (you can just search by the titles):


Looks like I’ve already voted for them :grinning:

An interesting idea that deserves its own discussion, so we’ve moved the related comments here.

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Done. Might have bust the timelines a little!

(Repost because of the timeline stuff after the merge - the original post was removed @anon810895)

4 March 2020:

Ray Dalio’s Bridgewater Associates is down 8% this year through February in its Pure Alpha II strategy after posting a loss during last month’s market turmoil, according to people familiar with the matter.

Pure Alpha II lost money last year for the first time in two decades, declining 0.5%, Bloomberg reported in January. It’s averaged returns of about 4% a year since 2011.

(Source - Bloomberg - Are you a robot?)

7 January 2020:

  • Bridgewater’s most leveraged fund declined 0.5% last year
  • This is Dalio’s fourth yearly loss since beginning in 1991

    Ray Dalio suffered his first annual loss since 2000 in his most prominent fund.

Bridgewater Associates Pure Alpha II fund fell 0.5% last year, even as many of his peers posted some of their best returns since 2008.

It was the fourth time he has lost money in a calendar year since starting Pure Alpha II in 1991, according to data compiled by Bloomberg and a person familiar with the results.

Dalio, whose firm manages about $80 billion in so-called macro funds, has had an annualized return of about 4% since the end of 2011 – even after his Pure Alpha II fund jumped almost 15% in 2018. Since inception, the fund gained 11.5% on an annual basis.

Here are some other returns for macro managers:

  • Alan Howard’s Brevan Howard Master Fund returned 8.4% last year
  • Bradley Wickens’s Broad Reach Fund returned 42.3% for 2019
  • Greg Coffey’s Kirkoswald Asset Management was up 29% through October.

(Source - Bloomberg - Are you a robot?)

4 December 2019:

  • Billionaire’s recent book has sold more than 2 million copies
  • His macro fund is down about 2% this year, trails some rivals

    Following peak returns of 45% in 2010 and 25% in 2011, the fund’s performance has struggled. Dalio’s flagship has returned an annualized 3.8% since the start of 2012, even with a 15% gain last year. That places it behind standouts such as Jeff Talpins’s Element Capital Management and Tudor Investment Corp. for the period, and it’s the same story over the past three years, according to data compiled by Bloomberg.

Of course, Bridgewater isn’t alone in trailing the markets for much of this decade. In recent years, macro managers have found it hard to make big profits trading in their usual fare of government bonds, currencies, commodities and stock indexes. In their heyday, these funds regularly produced double-digit gains. Bridgewater has racked up an annualized 11.4% since its start in 1991. (Paul Tudor Jones and Louis Bacon, who both started in the 1980s, have done even better.)

The difference between Dalio and his peers is investor response to the recent performance. In many cases, clients have fled. Perhaps the hardest hit has been Brevan Howard Asset Management, where assets peaked at more than $40 billion in 2013. It now manages about $7.5 billion. Bacon, who founded Moore Capital Management, said last month he was stepping back from his duties in part because of low returns.

Yet for many investors, Dalio’s reputation is undimmed – even for people like Michael Rosen, chief investment officer for Angeles Investment Advisors, which manages money for endowments and foundations. While Rosen dropped Bridgewater several years ago because he doesn’t think a macro strategy makes sense in the current environment, it didn’t affect his view of the founder.

(Source - Bloomberg - Are you a robot?)

@anon810895 merge Ray Dalio all weather portfolio ETFs - #2 with this thread maybe?


Freetrade team we really need more long dated bond ETFs. A big weakness in the Freetrade offering at the moment


Couldn’t agree more. They have a ‘long -term’ US Treasury ETF but it is only the 10 year bonds when there are 30 year bonds that exist.

Even Ray Dalio doesn’t know where to steer. Reuters - based on FT’s article:

… this month, through the 12th, its flagship hedge fund, Pure Alpha II, declined roughly 13%, the FT reported here on Sunday, citing two people familiar with its performance. The fund is down about 20% for the year, the report added.

“We did not know how to navigate the virus and chose not to because we didn’t think we had an edge in trading it. So, we stayed in our positions and in retrospect we should have cut all risk,” the newspaper quoted Dalio as saying.

“We’re disappointed because we should have made money rather than lost money in this move the way we did in 2008.”