Bridgewater said Chinese equities remain attractive after a strong rally helped its onshore fund deliver its best performance in at least five years.
Summary:
Bridgewater remains constructive on China equities
Onshore fund gains about 45% in 2025
Performance far outpaces CSI 300
Policy support and sentiment key drivers
Modest increase in China exposure planned
Bridgewater Associates has reaffirmed its constructive stance on Chinese equities, pointing to improving profit expectations and supportive policy signals after its onshore hedge fund delivered a standout performance in 2025.
In a December letter to investors, Bridgewater’s Shanghai-based private fund management arm said Chinese stocks “remain attractive to some extent” and described its outlook as “moderately optimistic,” both in absolute terms and relative to other asset classes. The firm cautioned that its assessment reflected conditions at the end of last year and remains subject to change as macro and policy dynamics evolve.
The comments follow a strong year for Bridgewater’s onshore All Weather Plus fund, which allocates across equities, bonds and commodities. The fund gained 9.1% in the fourth quarter, lifting its full-year return to about 44.5% before fees, comfortably outperforming the CSI 300 Index, which rose around 18% over the same period.
Bridgewater attributed the performance to a combination of supportive domestic policy messaging, easing external headwinds and improved market sentiment, including optimism linked to the success of Chinese AI firm DeepSeek. While persistent pressures such as trade tensions caused bouts of volatility during the year, the firm said its diversified, balanced strategy helped dampen drawdowns and capture opportunities across asset classes.
The strong result capped a record year for Bridgewater globally and reinforced its position in China’s fast-growing onshore hedge fund market, estimated at around 7 trillion yuan. Assets under management in China climbed to roughly 60 billion yuan in 2025, the highest among foreign hedge fund managers, and performance compared favourably with the roughly 22% average return for Chinese multi-asset hedge funds tracked by PaiPaiWang.
Looking ahead, Bridgewater said it expects China’s broadly supportive policy stance to remain in place. The firm added that policymakers retain both the willingness and tools to stabilise growth when needed, prompting it to maintain a modest increase in its exposure to China-related risk assets.
