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(Bloomberg) – Bridgewater Associates tells investors it is “moderately bullish” on Chinese stocks as the long sell-off has made valuations attractive, a statement that comes after the recent decline in Chinese stocks. This took place a few days before the crash.
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The company’s China private fund management unit told local investors at a roadshow earlier this month that the shares were worth owning, people said. The Shanghai-based unit also said it was “moderately bullish” on bonds, believing that policy remains accommodative to support growth and that there is room for interest rates to fall, the people said. They requested anonymity because the discussions were private.
Bridgewater’s cautious optimism comes as President Xi Jinping last week announced a monetary policy emphasis that emphasizes party control and regulatory oversight, and Beijing has failed to offer stronger monetary policy support. It was born just days before the Chinese market plunged.
China’s benchmark CSI300 index hit a five-year low on Monday, while the market downturn pushed the number of mutual fund closures to a five-year high, another sign of declining investor confidence. It becomes.
The market has since improved following Prime Minister Li Qiang’s instructions to stabilize struggling stocks and consideration of the country’s $278 billion market rescue plan. That said, many remain skeptical about whether it will be enough to end the rout.
The Hang Seng China Enterprise Stock Index rose 1.6% on Wednesday morning, while the CSI300 index fell 0.5%.
Fund managers around the world are weathering the escalating turmoil in China, with even the most experienced investors falling into the trap of an economic downturn. Singapore hedge fund Asia Genesis Asset Management closed its $300 million macro fund, falling 18.8% in the first few weeks of January, as it was bullish on China and shorted Japanese assets. Long-time Chinese bull Li Bei also admitted his mistake after suffering the worst loss of his career.
Bridgewater’s All-Weather Plus strategy, which invests in assets such as bonds and stocks, lost 3.1% after its equity holdings contributed -3.1% to its systematic All-Weather portfolio compared to gains from bonds and commodities, according to people familiar with the matter. But last year it rose 10.8% before fees. . Profit increased by 0.9% due to active management by the team.
The Ray Dalio-founded investment giant is “moderately bearish” on the commodity, in part because industrial metals remain under pressure from the deleveraging of China’s real estate market, people familiar with the matter said. He said there is.
China’s multi-asset hedge funds returned an average of 2.5% last year, outpacing equity funds’ losses of 2.45%, according to data from Shenzhen Paiwan Investment Management Company.
This strong performance further increases Bridgewater’s attractiveness to local investors. Onshore assets under management have grown to about 40 billion yuan ($5.6 billion), according to people familiar with the matter.
Bridgewater declined to comment. Caixin earlier reported the fund’s earnings.
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