What is the 10-Year Return on Bridgewater's All Weather Fund?
The 10-year return on Bridgewater's All Weather fund was 43 percent. This figure reflects the performance of one of the flagship funds managed by Bridgewater Associates, a prominent global hedge fund firm.
Understanding Bridgewater's All Weather Fund Performance
Bridgewater Associates, founded by Ray Dalio, is widely recognized as one of the largest and most influential hedge fund managers in the world. Its All Weather fund is a well-known portfolio designed to perform consistently across various economic environments by balancing risk exposures rather than asset allocations.
Key Performance Metrics Over a Decade
To provide a comprehensive understanding of the All Weather fund's performance, it's insightful to compare its 10-year return against other common investment strategies and benchmarks. The data for a recent 10-year period reveals the following:
| Investment Vehicle / Strategy | 10-Year Return |
|---|---|
| Bridgewater's All Weather Fund | 43 percent |
| Average Risk-Parity Fund | 42 percent |
| Traditional 60/40 Portfolio | 90 percent |
Contextualizing the Returns
While a 43 percent return over a decade represents positive growth, its comparative performance highlights important considerations for investors. The All Weather fund's return of 43 percent, although slightly outperforming the average risk-parity fund (42 percent), significantly lagged behind a traditional 60/40 portfolio, which yielded 90 percent over the same period.
A 60/40 portfolio typically allocates 60% of its assets to stocks and 40% to bonds, aiming for a balance of growth and stability. The substantial difference in returns underscores how different investment philosophies and market conditions can impact long-term performance.
About the All Weather Fund
The All Weather fund is built on a "risk parity" approach, which seeks to allocate risk equally across different asset classes, rather than capital. This means it aims for diversification by holding assets that perform well in different economic scenarios, such as:
- Periods of rising growth and rising inflation: Assets like commodities, inflation-indexed bonds.
- Periods of falling growth and falling inflation (deflation): Assets like nominal bonds.
- Periods of rising growth and falling inflation: Assets like stocks.
- Periods of falling growth and rising inflation (stagflation): Assets like gold.
This design aims to provide stable returns and reduced volatility regardless of market cycles, even if it means potentially underperforming simpler equity-heavy portfolios during strong bull markets.
