*

Bridgewater's onshore China strategy beat rivals with 37%

return

in 2024

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"All Weather" multi-asset strategy designed to mitigate

volatility

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Demand for strategy has soared since Trump won election

By Samuel Shen and Summer Zhen

SHANGHAI/HONG KONG, Jan 20 (Reuters) - Chinese hedge

fund managers are racing to launch products styled on

Bridgewater Associates' popular "All Weather" strategy, to meet

hot investor demand for a cushion against expected volatility

during Donald Trump's second U.S. presidency.

Bridgewater founder Ray Dalio's "All Weather" is a

volatility-mitigating, multi-asset strategy that helped shield

its Chinese clients from the brunt of the Sino-U.S. trade war

during Trump's first term.

The highly sought-after Bridgewater onshore China strategy

eclipsed most rival hedge fund products last year with an

eye-popping 37% return.

Demand for the strategy has soared since Trump won the

election in November and revived threats of higher trade tariffs

on China. But Bridgewater has been drawing billions of yuan and

had to limit the sales of its onshore funds, prompting a range

of rival product launches.

At least a dozen hedge funds with "All Weather" tags that

are seeking to piggyback on Bridgewater's success have been

launched since Trump's election win in early November, picking

up pace from previous months, according to official registration

data.

Major local players such as SHQX Asset Management and

Shanghai Luoshu Investment Co have also launched similar

strategies.

Yin Zhengxin, head of marketing at Luoshu, which is raising

money for competing products, compares the rivalry to how

Tesla's entry galvanised China's electric vehicle

industry.

"We will see local fund managers excel in All Weather

strategy in the next 3-5 years, potentially undercutting

Bridgewater's dominance," he said.

The opportunity has even lured global hedge fund titan Man

Group ( MNGPF ), whose China unit is preparing to offer mainland

investors access to its AHL TargetRisk strategy that is based on

'risk parity', the concept underpinning "All Weather", according

to two sources familiar with the plan.

Bridgewater and Man Group ( MNGPF ) did not immediately reply to

Reuters' requests for comment.

FLIGHT TO SAFETY

"All Weather" was designed by Dalio, a long-time China bull,

in 1996 and diversifies investments across assets including

stocks, bonds and commodities while balancing risks so that it

performs well in any economic condition - boom or bust,

inflation or deflation.

Bridgewater China's "All Weather" product was launched in

2018 and proved resilient during the Sino-U.S. trade war, the

COVID-19 pandemic, and even last spring's "quant quake" that

swiped many Chinese hedge funds.

Bridgewater China managed about 40 billion yuan at the start

of 2024 according to sources, and its assets likely ballooned

further over the past year. It posted positive returns every

year in the past five years despite a struggling Chinese

economy.

"When future uncertainty spikes, people would have concerns

putting money into single-risk assets," said Lv Chengtao,

president of SHQX Asset, one of China's biggest

commodities-trading hedge funds with over 10 billion yuan ($1.37

billion) under management.

The company's newly launched "All Weather" products drew

big inflows in the second half of last year, reflecting the

popularity of the strategy, Lv said.

Shanghai Quantinv Asset Management Co also launched its own

"All Weather"-type strategy, drawing inspiration from

Bridgewater, chairman Qian Cheng said.

Other Chinese hedge fund managers that have rolled out

similar products include Jroyal Asset, Rongsheng Fund and

Shanghai Lanyin Capital Management Co, according to the

companies' disclosures.

Carlos Casanova, Asia senior economist at UBP, said there

has been a huge flight to safety among Chinese investors and

"everyone was so worried about Trump and what would happen"

after his inauguration.

($1 = 7.3152 yuan)

(Reporting by Samuel Shen in Shanghai and Summer Zhen in Hong

Kong; Editing by Vidya Ranganathan and Muralikumar Anantharaman)