Bridgewater Associates' flagship fund, Pure Alpha, recorded an 8.2% gain in January amidst market turmoil related to AI stocks and uncertainties surrounding the new U.S. administration, according to a knowledgeable source.
The driving factors behind the hedge fund's performance in January remain unclear. In the previous year, the fund, identified as Pure Alpha 18% volatility, achieved an 11.3% increase.
In January, tech stocks experienced turbulence triggered by a Chinese AI startup asserting its model's competitiveness with leading U.S. rivals at a lower cost, causing Nvidia's shares to drop by approximately 17%.
Globally, stock markets fluctuated after President Trump announced potential tariffs on Canada, Mexico, and China, later deciding to lift tariffs on Mexico and Canada while upholding them on China.
Despite the volatile January, major U.S. stock indices ended the month positively, with the S&P 500 climbing by 2.7%, the Nasdaq Composite by 1.64%, and the Dow Jones Industrial Average by 4.7%.
At a recent Miami conference, co-chief investment officer Karen Karniol-Tambour advised investors to diversify their equity investments internationally and increase bond allocations to safeguard against any economic slowdown. She noted, The bar for the U.S. (equities) to keep being the outperformer has just really risen.