5 brand stocks loved by the world’s largest hedge funds

Hedge funds don’t get as much attention among investors as Cathie Wood’s Ark Invest exchange-traded fund (ETF) or Warren Buffett’s publicly traded funds. berkshire hathaway, but it’s worth keeping an eye on these private funds targeting high-net-worth individuals and institutional investors. After all, these companies sometimes manage assets exceeding $100 billion and have become major players in the stock market.

Bridgewater Associates is currently the world’s largest hedge fund, managing approximately $200 billion in assets. Bridgewater was founded by Ray Dalio in his 1975 and has grown rapidly over the years. The firm was one of the few hedge funds to emerge as winners during the Great Financial Crisis of 2008, and Mr. Dalio tends to focus his investment strategy on the macro economy, following the direction of the economy rather than the actions of individual companies. be.

Although Mr. Dalio is no longer involved with Bridgewater on a day-to-day basis, the fund still attracts a lot of attention. Bridgewater’s two largest holdings are his ETFs. iShares Core MSCI Emerging Markets ETF and iShares Core S&P500ETF. It is worth noting that the top five individual stock holdings as of the third quarter were all major brand consumer staples stocks that investors use on a daily basis. Let’s take a look at each.

Image source: Getty Images.

1. Procter & Gamble (4.2% of Bridgewater’s portfolio)

procter and gamble (PG -0.39%) may be the best consumer defensive stock you can find on the market. The company is nearly 200 years old, has about 20 brands, and generates more than $1 billion in annual revenue. P&G’s strong positions in products such as diapers, shampoo, razors, and paper products make it virtually recession-proof, and the company also has the ability to raise its dividend and generate returns for investors. There is also a long history of It has increased dividends for 67 consecutive years and currently has a dividend yield of 2.5%.

2. Coca-Cola (3% of portfolio)

coca cola (KO -0.55%) is another consumer staples stock with many of the same strengths as Procter & Gamble. The company has a similar portfolio with several valuable brands as well as its namesake. These include Minute Maid, Fanta, Powerade, Costa Coffee, and a minority stake. monster beverage.

Coca-Cola also has a long track record of increasing dividends and benefits from a variety of competitive advantages, including a well-known brand, distribution network, and marketing strength. Carbonated beverage consumption may be in slow decline, but Coca-Cola is diversifying beyond just traditional sodas.

3. Costco Wholesale (2.8% of portfolio)

costco wholesale (Fee 1.11%) is one of the world’s largest retailers and another classic defensive stock. Not only is the company known for its lowest prices on products, but it also locks in customers through a membership model. In fact, the company makes most of its profits from membership fees.

This stock is a smart investment during recessions because members are less likely to leave the service. Costco also recently paid a special dividend of $15 per share in December, and Bridgewater may have held the stock to take advantage of this.

4. PepsiCo (2.7% of portfolio)

pepsico (PEP -0.83%) offers many of the same benefits as Coca-Cola, but with the added diversification of food businesses. The company owns Frito-Lay Snacks, which generates about the same revenue as its North American beverage division, and also owns Quaker Foods.

Pepsi is another dividend king in Bridgewater’s portfolio, having raised its dividend for 51 consecutive years. Like Coca-Cola, the company also enjoys advantages such as distribution network, marketing, and brand advantages, making it well-positioned for continued growth.

5. Walmart (2.6% of portfolio)

walmart (WMT -0.53%) is the world’s largest retailer, and the company has taken significant steps to become more competitive in recent years, strengthening its e-commerce offering and leveraging its grocery store strengths.

Like most stocks on this list, Walmart is a reliable dividend growth stock with 50 consecutive dividend increases. Its reputation for low prices and its strength in serving low- to middle-income customers make it a recession-proof stock.

What These Stocks Say About Bridgewater

Bridgewater appears to be taking a defensive position in the market, preparing for a potential recession by investing in high-dividend, recession-resistant stocks. Dalio has recently advocated holding cash, a sign that he thinks it’s worth taking a conservative stance on the market at this point.

That doesn’t mean the stock market is headed for a recession, but understanding how large investors are approaching current market conditions can help you make your own investment decisions.