Bridgewater’s risk-parity shift jolts a USD 400bn quant trade

The USD 400bn corner of quant investing known as risk parity has a history of doubt and division, and Bridgewater Associates has started a new chapter.

Ray Dalio is founder of Bridgewater Associates where he serves as co-CIO and co-chairman. Photo: Brian Snyder/Reuters/Ritzau Scanpix/REUTERS / X90051

Ray Dalio’s USD 138bn asset manager has tweaked its version of the strategy by moving into alternatives to conventional bonds as yields hit historic lows, a person familiar with the matter has confirmed.

The shift, telegraphed by the firm in a July report, drives a new wedge between Bridgewater and risk-parity purists and speaks directly to concerns that have long dogged the systematic investing approach.

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