Bridgewater Gains 7.8% in December as One Big Month Saves Year

(Bloomberg) — Ray Dalio’s Bridgewater Associates posted a December return of 7.8% through Wednesday for its flagship hedge fund and is now poised to book its best annual performance since 2018, after a lackluster 11 months.

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The $150 billion firm’s Pure Alpha II fund was up 8.14% on the year, according to a person familiar with the performance who declined to elaborate on what wagers contributed to the December results.

Rising U.S. equities may have helped. The S&P 500 gained 5% this month through Wednesday and is trading near a record high, and European stock indexes also advanced. Bridgewater could have taken profits on bets that the yield-curve would flatten following mid-December’s Federal Reserve meeting — a trade that has been popular among fixed-income investors since May.

Like many of its peers, Bridgewater’s macro fund has struggled for the past decade, returning an annualized 1.6% for the 10 years through November. The firm lost 12.6% last year, and several institutional clients pulled their money.

In coming days, the world’s biggest hedge fund may name someone to succeed Chief Executive Officer David McCormick, who’s expected to announce that he’ll seek the Republican nomination for a U.S. Senate seat in Pennsylvania.

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