(Bloomberg) -- Bridgewater Associates erased most of the returns it notched through this year’s first three quarters, ruining what was shaping up to be the hedge fund giant’s best annual performance in more than a decade.
The Pure Alpha fund tumbled about 13% in the fourth quarter through November, cutting its year-to-date gain to 6%, according to people familiar with the matter. It had surged 22% as of the end of September, putting it on track for its best year since 2010, when it rose about 27%.
Bridgewater’s bigger and more-leveraged Pure Alpha II fund tumbled about 20% in the two months through Nov. 30, paring its 2022 advance to 7.8%, one of the people said.
A representative for Westport, Connecticut-based Bridgewater declined to comment.
Bridgewater’s macro-trading peers have made money for most of this year by betting on rising interest rates, a strong dollar and falling stocks. Those trends reversed in recent weeks as the Federal Reserve signaled that it would slow the pace of monetary tightening.
Yields on 10-year Treasuries dropped to about 3.5% now from roughly 4.2% in early November. The dollar has tumbled against all major currencies since the end of September, and equity markets rebounded sharply.
In October, Bridgewater founder Ray Dalio relinquished control of the firm that now manages about $150 billion, handing the reins to the next generation of leaders. Although he’s no longer a co-chief investment officer, he still mentors the firm’s money-management team.
Read more: Dalio Gives Up Control of Bridgewater in Final Succession Step
(Updates with full November returns in second paragraph, Pure Alpha II performance in third.)
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