Billionaire Ray Dalio’s 9 Best Stocks and ETFs

Ray Dalio’s Bridgewater Associates is the world’s largest hedge fund with $126.4 billion in assets. According to Forbes, Dalio’s own net worth is around $19 billion. Bridgewater’s popular Pure His Alpha II fund struggled amid volatility in Wild His markets in 2020, posting a 12.6% loss for the year. However, the

Dario and Pure Alpha II funds have outperformed in 2022 in a weak market environment, posting an impressive 6% gain by early December.

With the possibility of a better year ahead in 2023, here are Bridgewater’s nine top stock and fund holdings, according to its latest 13F filings:

iShares Core S&P 500 ETF (IVV)

The good news for investors worried about the stock market outlook for 2023 is that Dalio’s biggest investment is iShares’ IVV S&P 500 Exchange Traded Fund (ETF). In other words, Dalio is betting that the U.S. stock market will likely recover from its weakness in his 2022 and the U.S. economy will likely avoid a prolonged or severe recession. The S&P 500 is weighted by market capitalization. In other words, the top companies include Apple (AAPL) and Microsoft. (MSFT) and Alphabet Inc. (GOOG, GOOGL). Bridgewater owns more than 2 million shares of his IVV ETF worth $793.2 million, representing approximately 4.3% of Bridgewater’s total portfolio.

Procter & Gamble Co. (PG)

Procter & Gamble is a leading consumer goods company with popular brands such as Pampers, Tide and Bounty. It is also Bridgewater’s largest single public company. PG stocks have been well below the S&P 500 so far in 2023, with a total return of -8.9% year-to-date through February 16. Consumer staples stocks such as Procter & Gamble are typically considered solid defensive investments during times of market uncertainty. Procter reported a 0.9% decline in fourth quarter revenue and a 6.9% decline in net income. Bridgewater owns nearly 5 million of his PG shares worth $757.1 million.

iShares Core MSCI Emerging Markets ETF (IEMG)

The risks associated with crackdowns by U.S. and Chinese regulators and the threat of delisting Chinese stocks seemed too high for Dalio to justify some of his biggest Chinese investments in 2022. Last year, Bridgewater sold stakes in Alibaba Group Holding Ltd. (JD), Bilibili (BILI) and NetEase. (NTES). Instead, Dalio appears to be taking a more diversified approach to China through its IEMG Fund, an emerging markets ETF with only about 28% exposure to China. Bridgewater owns more than 14.5 million shares of his IEMG fund worth about $679.6 million after selling 347,293 of his shares in the fourth quarter.

Johnson & Johnson (JNJ)

Johnson & Johnson is a leading global manufacturer of pharmaceuticals and healthcare products. Dalio first entered into the deal in the first quarter of 2020 when his COVID-19 first emerged in the United States. Johnson & Johnson’s new public company in 2023 could act as a bullish catalyst. Bridgewater significantly reduced its exposure to Johnson & Johnson in the fourth quarter, selling more than 1.14 million shares. However, the company still owns 3.56 million of his JNJ shares worth more than $630 million.

PepsiCo Inc. (PEP)

PepsiCo is another blue chip consumer goods stock that makes a good defensive player in an uncertain environment. Like other defensive stocks, PepsiCo shares have underperformed the S&P 500 so far in 2023, with him posting a 2.9% year-to-date loss through Feb. 16. In the fourth quarter, PepsiCo reported his 10.9% revenue growth and his net profit of $518 million. Dalio, who has owned PepsiCo shares since the first quarter of 2020, reduced his stake by about 24% in the fourth quarter. Bridgewater still owns approximately 3.02 million PEP shares, valued at over $545.6 million.

Vanguard FTSE Emerging Markets ETF (VWO)

The Vanguard FTSE Emerging Markets Stock Index Fund ETF is another popular emerging market ETF. VWO is a way for Dalio to diversify his fund’s bet on emerging market economies, such as China, Taiwan and Brazil. The VWO fund is heavily exposed to geopolitical risks given Chinese and Taiwanese stocks make up nearly 44% of the fund’s holdings, but it may also benefit from the lifting of China’s COVID-19 restrictions in 2023. Bridgewater sold about 6% of its VWO fund shares in the fourth quarter, but the firm still holds 13.8 million shares worth roughly $539 million.

Coca-Cola Co. (KO)

Dalio rarely puts all his eggs in one basket. In addition to his large stake in PepsiCo, competitor Coca-Cola is another one of the fund’s largest holdings. Unfortunately, KO shares have lagged PepsiCo’s shares so far in 2023. In the fourth quarter, Coca-Cola reported 7% revenue growth but a 1% drop in global unit case volume. Coca-Cola has also been a top long-term holding of fellow billionaire and Berkshire Hathaway Inc. (BRK.A, BRK.B) CEO Warren Buffett, putting Dalio in good company. Bridgewater holds roughly 8.4 million shares of KO stock worth more than $535.6 million.

SPDR S&P 500 ETF Trust (SPY)

The SPDR S&P 500 ETF Trust is an S&P 500 fund that’s very similar to the IVV fund but is issued by State Street. The fund has a low 0.09% expense ratio and plenty of liquidity, and it tracks the S&P 500. Likely the only reason Dalio owns both the SPY and the IVV ETFs is to diversify his exposure to the S&P 500. Dalio reduced his SPY stake by 6% in the fourth quarter, selling 89,318 shares. Bridgewater now owns 1.37 million shares of the SPY fund worth about $525.5 million.

Walmart Inc. (WMT)

Walmart is a leading discount retailer. Despite struggles with inventory management and supply chain disruptions, Walmart’s business and stock have performed relatively well in the past year. Walmart reported 8.7% revenue growth and 8.2% U.S. same-store sales growth in the most recent quarter. In addition, global advertising revenue was up 30% and online sales were up 16% last quarter. Walmart is Dalio’s largest bet on a discount retailer, but he also holds stakes in competitors Target Corp. (TGT) and Costco Wholesale Corp. (COST). Bridgewater now owns about 3.4 million shares of WMT stock worth more than $482 million.