Trump's return triggers a surge in demand for safe havens. "Bridgewater-style" funds are frequently emerging in the Chinese market.

With the inauguration of US President-elect Trump approaching, a batch of "Bridgewater-style" funds are emerging in the Chinese market. To meet investors' demand for buffering against expected volatility during President Trump's second term, Chinese hedge fund managers are competing to launch products based on Bridgewater's "All Weather Strategy." Bridgewater founder Ray Dalio's "All Weather Strategy" is a multi-asset strategy that mitigates volatility and has helped its Chinese clients withstand the impact of the US-China trade war during President Trump's first term. Last year, the highly sought-after Bridgewater China onshore strategy beat most of its competitors' hedge fund products with a stunning 37% return rate. Since President Trump won the election last November and threatened to impose higher tariffs on China, demand for this strategy has skyrocketed. However, Bridgewater has already attracted billions of RMB in funds and had to limit the sale of its onshore funds, leading to the launch of a series of competing products. According to official registration data, at least a dozen hedge funds labeled with the "All Weather Strategy" have been seeking to ride on Bridgewater's success since President Trump's election victory in November, with the establishment of these funds accelerating compared to the previous months. Major domestic firms such as Qianxiang Assets and Lushu Investment have also launched similar strategies. A marketing director at Lushu Investment, which is currently raising funds for competing products, likened this competition to how Tesla, Inc. (TSLA.US) entering the Chinese electric vehicle industry spurred competition. He said, "In the next three to five years, we will see domestic fund managers perform well in the All Weather Strategy, potentially undermining Bridgewater's dominant position." According to sources, this opportunity has even attracted the attention of global hedge fund giant Man Group, whose Chinese subsidiary is preparing to offer its AHL TargetRisk strategy based on the "risk parity (basis of the All Weather Strategy)" to mainland investors. Bridgewater and Man Group did not immediately respond to requests for comment. Turning to Safe Assets The "All Weather Strategy," designed by Dalio in 1996 with a long-term bullish view on China, diversifies investments across assets such as stocks, bonds, and commodities, while balancing risk to perform well in any economic situation - whether in prosperity or recession, inflation, or deflation. Bridgewater China's "All Weather Strategy" product was launched in 2018 and has proven its resilience during periods such as the US-China trade war, the COVID-19 pandemic, and even the "quantitative earthquake" that swept through many Chinese hedge funds last spring. Sources reveal that Bridgewater China managed around 40 billion RMB by early 2024, and its assets may have further expanded over the past year. The company has achieved positive returns every year in the past five years. Lv Chengtao, President of Qianxiang Assets, said, "When uncertainty escalates in the future, people will worry about allocating funds to a single risky asset." Lv Chengtao stated that their newly launched "All Weather Strategy" product attracted a significant inflow of funds in the second half of last year, reflecting the popularity of the strategy. Qian Chengkuan, Chairman of Kuai Investments, stated that the company has also launched its own "All Weather Strategy" product, inspired by Bridgewater. Carlos Casanova, UBP's senior economist in Asia, said that Chinese investors are turning to safe assets in large numbers because "everyone is very concerned about Trump and what will happen after he takes office."