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Bridgewater Associates has added local stocks to its China hedge fund following a September rally that saw returns soar by 31%. Catalysts anchors Seana Smith and Madison Mills discuss this investment push amid the Chinese government's attempts to revive the nation's economy through stimulus measures.
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This post was written by Luke Carberry Mogan.
First up, Bridgewater Associates onshore China hedge fund adding exposure to local stocks following last month's rally that boosted the funds returns to 31% for the year. The firm saying the valuations do remain attractive. The fund is also long on bonds and holds a neutral stance on commodities as of September 30th year. But this is interesting given the moderate increase to its holdings in China following the excessive stimulus that we have seen coming out of the region. But the big question I think is whether or not this is going to be a sugar high that leads to a little bit of a positive lift for capital markets, but is that going to feed through to consumers? And that's the final thing that's really going to be needed for there to be continued lift to Chinese stocks, not only because of this not only stocks that are in the region, but of course, stocks that are trading in the US as well.
Yeah, yeah. Of course. And and and that's what you and I have been talking about now for what feels like a very, very long time just in terms of the stark underperformance of China's economy, what it would take in order to reignite or reintroduce some of that lost enthusiasm. Yes, we have seen stimulus moves or stimulus efforts from the Chinese government, but again, the question is whether or not it's enough. It doesn't seem like it is enough from consensus, I think. That would be pretty much the takeaway at this point. And then ultimately, what is necessary in order to continue this move to the upside and this outperformance. We know Bridgewater Associates with Ray Dalio, a long time China bull there. So again, he has seen opportunity within this area, but I think in terms of what is going to be that ultimate catalyst going forward, a key corporate colleague has been doing a great reporting on this and very much assumes like the question is out and the jury is out just in terms of what ultimately is necessary. There is more that is necessary, but what is going to take in order to really see continuing momentum in the region?
