Ray Dalio's hedge fund is now the biggest short-seller of European stocks as Bridgewater bets $5.7 billion

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Ray Dalio.Eoin Noonan/Web Summit via Getty Images

  • Ray Dalio’s Bridgewater holds 18 short positions against European companies worth about $5.7 billion, Bloomberg reports.

  • The hedge fund is set to profit from a decline in European stocks, but it could also be part of a hedging strategy.

  • In a Thursday interview with La Repubblica, Dalio explained he’s eyeing assets that can protect against inflation.

Ray Dalio’s Bridgewater Associates is betting at least $5.7 billion that European stocks will fall, making the hedge fund the largest short-seller in the region, according to Bloomberg.

The wager includes a $1 billion position against semiconductor company ASML Holding as well as a $752 million bet against TotalEnergies.

In total, Bridgewater has 18 short bets against European companies, but Bloomberg noted the positions could be even larger, as investment firms aren’t required to disclose smaller bets.

In addition, the positions could be part of a broader hedging strategy for the firm, as it isn’t yet clear if the goal is purely to profit from slumping stocks. 

Bridgewater’s European short-selling follows even bigger wagers in recent years. In 2020, it made a $14 billion bet against stocks there after building a $22 billion short position in 2018.

In the current market environment, Dalio has urged investors to stay away from cash amid high inflation, and also warned that stocks looked even less promising.

“Of course cash is still trash,” Dalio told CNBC in May. He added, “equities are trashier,” and that “real-return assets” are the best investments.

In a Thursday interview with newspaper La Repubblica, Dalio explained that he’s turning to assets that can protect against inflation, while avoiding debt assets and countries that could be hit by geopolitical turmoil.

Read the original article on Business Insider