The world's largest hedge fund loads up on Alibaba

Brian Snyder/Reuters

Ray Dalio, founder, co-chief investment officer and co-chairman of Bridgewater Associates, speaks at the 2017 Forbes Under 30 Summit in Boston, Massachusetts, U.S. October 2, 2017.

• Bridgewater Associates, the world's largest hedge fund that oversees $150 billion in assets under management, bought $15.7 million worth of Alibaba shares during the second quarter, regulatory filings show.
• Alibaba is one of the stocks included in the "FAANG+BAT" basket.
• Watch Alibaba trade in real time here.

Bridgewater Associates, the $150 billion hedge fund founded by Ray Dalio, bought 84,629 shares of Alibaba in the second quarter, worth $15.7 million, according to regulatory documents filed Tuesday. A back of the envelope calculation shows the stake was established at an average price of $185.52.

Alibaba is one of the market's most heavily-traded tech stocks and part of the FAANG+BAT basket, which also includes Facebook, Amazon, Apple, Netflix, Google, and Chinese tech giants Baidu and Tencent.

Bridgewater's buying of Alibaba shouldn't come as a surprise. Last September, the hedge fund launched a big investment fund in China as it was granted rare access to trade in local financial markets.

In a LinkedIn post from March, Dalio wrote that an escalating tit-for-tat trade war would be a reason to "worry." But this investment is a way for Dalio to gain exposure to China without having to worry about the impact of a trade war with China. That's because the e-commerce giant is responsible for about 85% of e-commerce sales in China - which helps provide insulation from the trade spat.

Alibaba shares gained 4% in the second quarter despite Trump's tariff trade spat with China. However they slumped 7% since July as investors have begun to rotate out of the FAANG+BAT group.

Dalio's other new investments disclosed in the filing include a $31.3 million stake in Cummins, a $14.4 million stake in Walmart, and a 76% decrease in its Facebook holdings - now worth $9.37 million.

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