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An ETF To Invest In Like Billionaire Fund Manager Ray Dalio

Published 03/06/2022, 05:16 pm
Updated 09/07/2023, 08:32 pm
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Ray Dalio, founder and co-chief Investment Officer of Bridgewater Associates, is one of the most widely followed investors worldwide. His strategy mainly relies on big-picture long-term trades founded on his outstanding global macroeconomic view.

He is also known for the "All Weather" concept, which relies on allocating risk rather than capital. As such, the billionaire investor has navigated numerous economic cycles over the decades, and his portfolio performed relatively smoothly in market downturns.

According to the most recent 13F filing with the US Securities and Exchange Commission (SEC), the hedge fund had a portfolio value of $24.8 billion at the end of the first quarter (Q1) of 2022.

The financial guru has recently expressed his concerns "about the impact of inflation and conflicts, both inside countries and between." In Q1, he invested mainly in healthcare, finance, consumer discretionary, consumer staples, and communications.

Examples Of Stocks Held By Ray Dalio

InvestingPro provides access to various Ray Dalio stocks that can appeal to long-term investors. For example, the most significant holdings in Bridgewater's investment portfolio are:

  • Vanguard FTSE Emerging Markets Index Fund ETF Shares (NYSE:VWO)
  • Procter & Gamble (NYSE:PG)
  • iShares Core MSCI Emerging Markets ETF (NYSE:IEMG)
  • iShares MSCI Emerging Markets ETF (NYSE:EEM);
  • SPDR® S&P 500 (NYSE:SPY)
  • China-based tech giant Alibaba (NYSE:BABA)
  • Johnson & Johnson (NYSE:JNJ)
  • Coca-Cola (NYSE:KO)
  • PepsiCo (NASDAQ:PEP)
  • Costco Wholesale (NASDAQ:COST).

Those ten names comprise around a third of all holdings.

Meanwhile, among the large-capitalization (cap) stocks, we see Berkshire Hathaway (NYSE:BRKa); Johnson & Johnson; Visa (NYSE:V); Exxon Mobil (NYSE:XOM); JPMorgan Chase (NYSE:JPM); and Procter & Gamble.

According to the last two 13F filings, the biggest stock purchases include the iShares MSCI Emerging Markets ETF; the iShares Core MSCI Emerging Markets ETF; Alibaba Group; the Vanguard FTSE Emerging Markets Index Fund ETF Shares; and Procter & Gamble.

In terms of the fastest-growing companies in the portfolio, we have Chinese electric vehicle (EV) names Xpeng (NYSE:XPEV), Li Auto (NASDAQ:LI) and Nio (NYSE:NIO); China-based online recruitment services provider Kanzhun (NASDAQ:BZ); ConocoPhillips (NYSE:COP); Pfizer (NYSE:PFE); and Airbnb (NASDAQ:ABNB).

Investors looking for undervalued shares relative to fair value could research Chinese names Alibaba, Baidu (NASDAQ:BIDU) and Pinduoduo (NASDAQ:PDD); Berkshire Hathaway; UK-based LyondellBasell Industries (NYSE:LYB); and General Electric (NYSE:GE).

Similarly, stocks with low price-to-earnings (P/E) ratios shares also deserve readers' attention. Examples include Ford Motor (NYSE:F); China-based personal financial services platform Lufax Holding (NYSE:LU); LyondellBasell Industries; chemicals giant Dow Inc (NYSE:DOW); Intel (NASDAQ:INTC); Tyson Foods (NYSE:TSN); and Berkshire Hathaway.

Meanwhile, high-growth dividend shares to focus on would be Southern Copper (NYSE:SCCO); the iShares Core MSCI Emerging Markets ETF; AT&T (NYSE:T); International Business Machines (NYSE:IBM); Philip Morris International (NYSE:PM); and Kraft Heinz (NASDAQ:KHC).

Finally, readers might be interested to know several stocks in Ray Dalio's portfolio have bullish analyst targets. For instance, biotech play BeiGene (NASDAQ:BGNE); Chinese companies NIO, Kanzhun, Bilibili (NASDAQ:BILI), and GDS (NASDAQ:GDS); and medical device firm DexCom (NASDAQ:DXCM) could see significant upside from their current price levels.

Picking stocks appropriate for long-term portfolios requires research, which may prove difficult for most retail investors. We should also note that stock lists provided on the InvestingPro website may not always meet the full portfolio objectives of all readers. In that case, they may also consider researching an exchange-traded fund (ETF) that offers exposure to several stocks held by Ray Dalio.

Fidelity MSCI Consumer Staples Index ETF

  • Current Price: $44.75
  • 52-week range: $41.54 - $49.03
  • Dividend yield: 2.27%
  • Expense ratio: 0.08% per year

Our fund for today, the Fidelity MSCI Consumer Staples Index ETF (NYSE:FSTA), provides exposure to US consumer staples names. This passively-managed fund started trading in October 2013.FSTA Weekly

Food & staples retailing names have the highest slice with 23.3%. Then come beverages (23.1%), food products (20.6%), household products (20.6%), tobacco (8.2%), and personal products (3.9%). The top 10 stocks in the portfolio comprise more than 60% of $1.1 billion in net assets.

Leading names in the fund include Procter & Gamble, Coca-Cola, PepsiCo, Costco Wholesale, and Walmart (NYSE:WMT).

So far, in 2022, the ETF has declined 4% but still outperformed the S&P 500 index, which is down 12.3% year-to-date. Meanwhile, FSTA has returned nearly 2.5% over the past 12 months.

Finally, the fund's trailing price-to-earnings (P/E) and price-to-book (P/B) ratios are 24.76x and 4.88x. A potential decline toward $43 or even below could improve the margin of safety.

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