Yahoo Finance’s Alexandra Semenova joins the Live show to discuss Ray Dalio’s Bridgewater flagship fund.
- Bridgewater Associates' flagship fund posted a 32% gain in the first half of 2022 boosted by market volatility. Yahoo Finance's Alexander Semenova joins us with the details. Alexandra.
ALEXANDRA SEMENOVA: Yeah, that's right, guys. Everyone has had a pretty rough start to the year everyone except for, apparently, Ray Dalio, whose hedge fund, Bridgewater Associates, the largest hedge fund in the world, saw its flagship Pure Alpha strategy gain 32.2% through June. This, of course, came as the S&P 500 shed more than 20% in the first six months of the year. And Pure Alpha generated returns in 65% of the markets, where it trades.
Those categories include interest rates, stocks, commodities, and sovereign and corporate credit. Now it's specifically profited on the market dislocation caused by inflation and rising interest rates as central banks moved forward to try to rein in price levels. You know, look at the performance in 2020. The fund was down. It didn't profit off of the market dislocation that we saw in 2020. It was specifically this rate environment that really pushed the strategy forward.
- Now we do know that hedge fund performance, that was mixed during the quarter. Some prominent hedge funds, we know they had big losses. Why did this one in particular do well?
ALEXANDRA SEMENOVA: Well, Pure Alpha is a macro strategy. As we discussed recently on the show, global macro funds were very strong performers during the quarter during mixed performance for hedge funds more broadly. As we saw, Melvin Capital closed its doors. Tiger Global saw 50% of its fund just erased during the first half of the year. But you know, strategies like Pure Alpha, they aim to profit off of broad market swings that are caused by volatility and this rate environment that we're in.