According to regulatory filings, Bridgewater Associates, one of the largest hedge funds globally, divested its holdings in five major US banking giants, namely JPMorgan & Co, Bank of America Corp, Wells Fargo & Co, Goldman Sachs Group Inc, and Morgan Stanley, in the first quarter of the year. The firm, which was founded by billionaire Ray Dalio, also reduced its exposure to Citigroup Inc by roughly 50%, as shown in the 13-Fs filed quarterly. Although these filings may not accurately reflect the current positions of hedge funds and other institutional investors, they provide a snapshot of what funds owned on the last day of the quarter.
Global hedge funds’ exposure to US banking stocks reached a ten-year low in March, following the collapses of Silicon Valley and Signature banks, as well as UBS’ hasty takeover of Credit Suisse. Bridgewater did not comment on these divestitures. Moreover, the firm also trimmed its holdings in smaller banks such as Bank of Hawaii Corp and Pacwest Bancorp, as well as regional lenders PNC Financial Services Group, Citizens Financial Group, and Capital One Financial Corp.
In December, Bank of America was Bridgewater’s largest stake in banks, valued at $106.2 million, followed by $92.8 million in JPMorgan. Bridgewater also exhibited a bearish stance on European banks in March, as fears of contagion heightened following SVB’s failure. In a recent development, JPMorgan purchased First Republic Bank after US regulators seized the latter company.