After reducing its stake in the ETF during the third quarter,
Ray Dalio's Bridgewater Associates more than doubled its interest
in the iShares MSCI Brazil Index Fund (NYSE:
) in the fourth quarter, according to a 13F filing with the
Securities and Exchange Commission.
The filing, released Wednesday after the close of U.S.
markets, indicates Bridgewater now holds more than
2.85 million shares of EWZ
, the largest ETF tracking Latin America's largest economy.
Bridgewater's 13F for the third quarter of 2012 showed the
world's largest hedge fund owned
1.15 million shares of EWZ at the time
Bridgewater snatching up more EWZ in the fourth quarter is
obviously a departure from what was seen in the third quarter,
when the hedge fund
pared its stake in the ETF by about 850,000
. Bridgewater initiated its position in EWZ in the second quarter
In the second quarter of last year, Bridgewater purchased just
two-million shares of EWZ at around $56
. Without confirmation from Dalio or Bridgewater, it is just
speculation, but it appears the firm did some dollar-cost
averaging with EWZ in Q4 as the ETF never traded above $56 during
the quarter. With the ETF now hovering around that price area,
Bridgewater may be showing a profit on the position.
Even with a stake of over 2.85 million shares, Bridgewater
owns a scant percentage of the 161.1 million shares outstanding
EWZ currently has
More noteworthy is the fact Dalio is invested in EWZ at all.
Last year, EWZ was by far the worst performer of the four major
tracking the BRIC nations. Year-to-date, EWZ has slid about 1.7
due in large part to the slack performance
by Petrobras (NYSE:
Petrobras, Brazil's state-run oil company, is EWZ's largest
holding as two securities issued by the company combine for over
12 percent of the ETF's weight. That is not good news as
Petrobras is extending its run as the worst-performing major
global oil stock. In the past month alone, the shares have
plunged 18 percent.
Perhaps curiously, Bridgewater has increased its exposure to
Brazil (and Petrobras) in another way. At the end of Q3, the
hedge fund owned over 3.33 million shares of the iShares MSCI
Emerging Markets Index Fund (NYSE:
), the second-largest emerging markets ETF by assets. The Q4 13F
indicates Bridegwater's stake in that ETF jumped to over 5.67
Petrobras is the eleventh-largest holding in EEM and Brazil is
the third-largest country weight at 12.7 percent. But wait, there
At the end of the third quarter, Bridgewater held more than
4.92 million shares of what is now the Vanguard FTSE Emerging
Markets ETF (NYSE:
), the largest emerging markets ETF by assets. The hedge fund
held over 6.73 million shares of VWO at the end of last year.
Currently, VWO is tracking a transition index as it prepares
to go over to the FTSE Emerging Markets Index later this year.
That index features Petrobras as its fourth-largest holding and a
15.71 allocation to Brazil,
according to FTSE data
For more on ETFs, click
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