The world's biggest hedge fund, Ray Dalio's Bridgewater Associates got into some hot water in the past few months when it was accused by many members of the underperforming "hedge fund hotel" club for being the "risk parity" catalyst that sent the market tumbling in August, and perhaps for being the catalyst for the August 24 market crash.
And while the bulk of Bridgewater's asset are in various commodities and futures, most of which are never reported to the public, earlier today it did disclose its long holdings in public equities when it filed its latest 13F. Perhaps those accusing Bridgewater of being the market-moving catalyst did have a point, because after posting a total AUM of $10.8 billion at June, this total declined by a whopping 31% to just $7.5 billion as of September 30.
Here is what Brigewater was dumping (and adding).
Bridgewater sold 41% of its holdings in the world's two largest EM ETFs in the third quarter amid a rout in developing-nation assets. Specifically, it cut its investments in Vanguard Group Inc. and BlackRock Inc.’s ETFs to a combined 104 million shares, from 175 million in the previous three-month period.
The value of the ETF holdings dropped more than 50 percent to $3.4 billion as a result of share price declines and the divestments.
In other words, if anyone is looking for the culprits behind the aggressive ETFlash Crash of August 24, Bridgewater may indeed be a good starting point.