Ray Dalio’s All Weather up 8.6% in 2014

Jan 27 2015 | 6:01am ET

No rain clouds are hanging over hedge fund manager Ray Dalio these days. 

Bridgewater Associates’ All Weather fund returned 8.6% net of fees in 2014, according to an investment report reviewed by Forbes. According to company statements, the fund retreated roughly 4% net in 2013.

Dalio’s Bridgewater firm manages roughly $157 billion, making it the largest hedge fund by assets in the world. It’s All Weather fund comprises roughly $80 billion of the firm’s assets. The fund employs a “risk-parity strategy” centered on generating positive returns by “leveraging up bond investments to balance out portfolios.”

Meanwhile, the firm’s Pure Alpha hedge fund returned 3.6% net of fees in 2014. This is down compared to the Standard & Poor’s 500 index returns of 13.7%.

Over the last five years, the Pure Alpha fund has returned 14.8%. Pure Alpha follows a traditional macroeconomic hedge fund strategy by actively investing in stocks, bonds, commodities and currencies.

In December, Dalio announced it is launching its first new strategy since 1996. The "Bridgewater Optimal Portfolio" will combine Bridgewater’s main investing styles from Pure Alpha and All Weather.

The new “Optimal Portfolio” is only available to institutional investors like universities, public pensions, and charities.

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