LAST UPDATE 22:25
A $ 6.7 billion “bet” against European corporate securities has been made by Bridgewater Associates of the famous big investor Ray Dalio, according to the Breakout Point quoted by Reuters.
According to stock listings collected by Breakout Point, the largest hedge fund in the world has opened a short position of 1 billion dollars only in the Dutch manufacturer of microchips ASML, while in TotalEnergies the position it has taken is worth 752 million dollars and in the pharmaceutical Sanofi $ 646 million.
In total, Bridgewater has opened short positions in 21 European titles this week.
Among others, the Spanish banks Banco Santander and Banco Bilbao Vizcaya Argentaria, the French BNP Paribas and the Italian Intesa Sanpaolo have been targeted by the hedge fund.
It is recalled that a short position is built through the sale of borrowed shares by someone who expects to reap the profits from their repurchase at a lower price if this actually happens in the market. Otherwise, if the price of the security increases, then the investor closes his position with losses.
A useful strategy for hedge funds especially in bear market periods, amid wider market pressures from rising interest rates and rapid inflation.
It is noted, however, that it is not clear from the listings whether Bridgewater intends to take advantage of falling prices, or is part of a broader hedging strategy of other bets, calculated by mathematical models.
On the other hand, of course, the short positions of Ray Dalio’s company are likely to exceed the amount of 6.7 billion as the regulatory rules do not require the publication of smaller orders.
Based on its position, however, Bridgewater, which manages assets worth a total of $ 150 billion worldwide, is currently the largest short-seller in Europe.
In an interview with La Repubblica newspaper published today, Thursday, Ray Dalio said that he buys assets that offer protection against inflation while moving away from debt assets and from countries at risk of internal strife or war.
In any case, stock sorting is a common practice of Bridgewater, which had bet 14 billion against European stocks in 2020 – including a short position in ASML – as well as $ 22 billion in 2018.