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Vanguard FTSE Emerging Markets ETF (VWO)

According to Bridgewater’s latest 13F filing to the SEC, the fund held 22.72 million shares of Vanguard FTSE Emerging Markets ETF at the end of March. With a market value of around $1.05 billion at the time, VWO was the largest holding in Dalio’s portfolio.

VWO tracks the FTSE Emerging Markets All Cap China A Inclusion Index and provides investors with convenient exposure to stocks in emerging markets like China, Brazil, and South Africa.

The ETF holds more than 5,000 stocks. Its top holdings include industry heavyweights like chipmaking giant Taiwan Semiconductor Manufacturing, Chinese tech behemoth Tencent Holdings, and Indian multinational conglomerate Reliance Industries.

In a recent conversation with another investing legend, Jeremy Grantham, Dalio said he’s looking at countries with good income statements and balance sheets that can weather the storm.

“Emerging Asia is very interesting. India is interesting,” he adds.

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Procter & Gamble (PG)

Bridgewater’s second-largest holding is a defensive stock with the ability to deliver cash returns to investors in different economic environments: Procter & Gamble.

Last month, P&G’s board announced a 5% dividend increase, marking the company’s 66th consecutive annual payout increase. The stock currently offers an annual dividend yield of 2.5%.

It’s easy to see why the company is able to maintain such a streak.

P&G is a consumer staples giant with a portfolio of trusted brands like Bounty paper towels, Crest toothpaste, Gillette razor blades, and Tide detergent. These are products that households buy on a regular basis, regardless of what the economy is doing.

Alibaba Group Holding (BABA)

Chinese tech stocks haven’t exactly been market darlings. Ecommerce giant Alibaba Group, for instance, is down 21% year to date and 55% over the last 12 months.

But Bridgewater Associates still likes the company. As of Mar. 31, it owned 7.5 million shares of Alibaba — a stake valued at $813.9 million at the time.

The downturn in Alibaba shares could give contrarian investors something to think about. In fact, we might be at an inflection point already.

The company reported earnings on Thursday morning. In the March quarter, revenue grew 9% year over year to $32.2 billion. Its adjusted earnings of $1.55 per share handsomely beat Wall Street’s expectation of $1.07 per share.

Thanks to a solid earnings report, Alibaba closed with a nearly 15% gain on Thursday.

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Fine art as an investment

Stocks can be volatile, cryptos make big swings to either side, and even gold is not immune to the market’s ups and downs.

That’s why if you are looking for the ultimate hedge, it could be worthwhile to check out a real, but overlooked asset: fine art.

Contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.

And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.

On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.

Earlier this year, Bank of America investment chief Michael Harnett singled out artwork as a sharp way to outperform over the next decade — due largely to the asset’s track record as an inflation hedge.

Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich. But with a new investing platform, you can invest in iconic artworks just like Jeff Bezos and Bill Gates do.

About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. Prior to joining the team, he was a research analyst and editor at one of the leading financial publishing companies in North America. An avid advocate of investing for passive income, he wrote a monthly dividend stock newsletter for the better half of the past decade. Jing holds a Master’s Degree in Economics and an Honours Bachelor of Science Degree, both from the University of Toronto.

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