Ray Dalio's Bridgewater Dumps S&P 500, Pours Billions Into Gold and Alibaba

One of the world’s most closely watched hedge funds, Bridgewater Associates—led by billionaire investor Ray Dalio—has begun a significant reshuffle in its investment strategy, moving away from traditional US equities and into more defensive and strategic global plays.

According to the firm’s latest 13F filing with the U.S. Securities and Exchange Commission, Bridgewater has slashed its holdings in the SPDR S&P 500 ETF Trust (SPY), now allocating just 8.5% of its portfolio to the US large-cap benchmark. This marks a stark shift from previous quarters, where the ETF made up a much larger portion of the fund's exposure.

Dalio’s decision appears to be a direct response to growing concerns over the US economy. The billionaire investor has long warned of looming stagflation—an economic scenario marked by slowing growth, rising unemployment, and persistent inflation. The weakening US dollar, which Dalio views as a long-term risk to global economic stability, seems to have further prompted this strategic realignment.

To hedge against these macroeconomic risks, Bridgewater has significantly boosted its gold holdings. The fund increased its stake in the SPDR Gold Shares ETF (GLD) by approximately 33%, bringing the total value of the gold position to around US$340 million. Gold is widely viewed as a safe-haven asset, especially during times of economic uncertainty and currency devaluation.

But Bridgewater’s new strategy isn’t purely defensive. In a surprising yet assertive move, the fund has dramatically increased its exposure to Chinese tech giant Alibaba Group Holding Ltd (NYSE: BABA). The hedge fund increased its stake in Alibaba by over 3,000%, now holding 5.66 million shares valued at roughly US$680 million. This makes Alibaba one of the top holdings in Bridgewater’s portfolio.

Alibaba shares have surged approximately 42% year-to-date, buoyed by a strong rebound in its cloud computing and AI-driven divisions. This rally reflects improving sentiment around Chinese tech stocks, especially as regulatory pressures from Beijing begin to ease.

Dalio’s dual approach—hedging with gold while betting big on Chinese innovation—signals a nuanced outlook on global markets. It reflects both caution over US economic policy and optimism about opportunities in emerging markets.

With global markets entering a more volatile phase, many institutional investors may look to follow Bridgewater’s lead in rethinking traditional portfolio allocations. Whether this pivot pays off remains to be seen, but if history is any guide, when Ray Dalio makes a move, Wall Street pays attention.

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