Bridgewater Associates, the world's largest hedge fund known as the "hedge fund king," has seen its products become extremely popular in China's market. The country's wealthiest investor groups are injecting billions of yuan into major domestic private banks just to qualify for purchasing these hedge fund products.

This massive potential capital influx reflects China's high-net-worth individuals' growing preference for investing funds in stock markets. Combined with the ongoing "deposit migration" wave, this means A-shares and Hong Kong stocks are poised to welcome substantial incremental market capital inflows, potentially sustaining the current robust rally led by the surging AI computing infrastructure chain and innovative pharmaceutical sectors.

Reports indicate that lending institutions including China Merchants Bank are reserving this American hedge fund's products for their top-tier clients, typically requiring them to hold at least 10 million yuan (approximately $1.4 million) in assets at the bank. Sources reveal that demand is so strong that some high-net-worth clients can only purchase extremely small portions of Bridgewater fund shares relative to their bank assets, sometimes unable to purchase any at all.

Despite Bridgewater's global products showing mediocre performance over the past decade, the company's fundraising scale and investment returns in China have been singing high notes. In China's 2024 market, even as early-year market declines hurt some competitors, the hedge fund company still achieved investment returns exceeding 35% in 2024, significantly outperforming all competitors.

**China's Private Fund Hermes: Bridgewater's Onshore Funds Go Viral, Scarce Quotas Trigger Wealthy Capital Queues**

"Bridgewater has become the 'Hermes' of China's private fund sector," said a senior consultant from Shanghai, referring to the French luxury brand's iconic scarcity status globally. "Like Hermes custom pieces, having money doesn't mean you can buy it."

Strong demand has frustrated some wealthy potential buyers, as Bridgewater limits large capital inflows to maintain fund manageability. In China's market, Bridgewater stands out as relatively unique, while many billion-dollar international asset management institutions from global markets—including top-tier Wall Street asset managers—have seen their hedge funds or other asset management products perform poorly locally or fail to capture sufficient market share from domestic giants.

According to China Securities Investment Fund Association statistics, Bridgewater's international hedge fund competitors D.E. Shaw and Two Sigma manage only 5-10 billion yuan in Chinese assets, far less than Bridgewater. Wall Street mutual fund giant Vanguard completely withdrew from China two years ago.

**Bridgewater Records Strong Gains—Company's Four Funds Achieve Double-Digit Strong Investment Returns**

Bridgewater's robust growth in China's market contrasts sharply with its performance in other global regions. The Connecticut-based Westport hedge fund company has seen asset scale decline elsewhere, partly due to poor performance and the company's restrictions on new capital inflows for better fund management.

Brand recognition and strong performance have driven fund share purchases for Bridgewater in China's market. Although founder Ray Dalio no longer works at Bridgewater, the billionaire remains household name in China's market due to his decades of visits to China and optimistic long-term investment outlook for China, even as many Wall Street hedge fund competitors have become cautious.

According to an investor letter, Bridgewater's China onshore funds gained 18% in the first seven months of this year, with annualized returns approaching 20% since establishment in 2021 and maximum drawdown of only 6.6%. In contrast, China's major stock benchmark indices have shown annualized declines of about 5.2% since early 2021.

**Foreign Capital Increases China Asset Allocation, Bridgewater, Goldman Sachs and Morgan Stanley All Bullish on Chinese Stock Market Prospects**

Contrasting sharply with the slowing stock price growth momentum of AI computing infrastructure leaders like NVIDIA in the US stock market, Asian tech stocks, particularly Chinese cloud computing leaders like Alibaba, and China's AI computing infrastructure chain and domestic substitution hot stocks have recently surged dramatically.

Driven by explosive global AI infrastructure demand, China's A-share market AI computing infrastructure sector and "domestic chip substitution" related sectors under the backdrop of long-term China-US competition have become market focal points, with multiple AI computing and chip leading stocks hitting new highs with synchronized strong earnings growth.

As Chinese internet and cloud computing giant Alibaba announced better-than-expected earnings and demonstrated an ambitious "artificial intelligence super blueprint," it further ignited China's stock market AI investment fever, maintaining strong momentum for Chinese tech stocks favored by global capital this year.

A Morgan Stanley report shows global hedge funds have increased bullish bets on Chinese stocks, with August potentially marking the largest single-month buying since February. Morgan Stanley noted that since early August, hedge fund buying has favored A-shares in domestic markets, contrasting sharply with capital flowing into Hong Kong tech stocks after DeepSeek ignited China's AI wave in February.

In July, hedge fund king Bridgewater became more optimistic about Chinese stock market prospects. In a second-quarter investor letter, Bridgewater's onshore China subsidiary stated that as of June 30, its view on China's stock market was upgraded to "moderate increase" compared to the "All Weather" strategy allocation, citing policy support, AI investment fever sweeping China's market, and relatively low Chinese stock valuations.

"Looking ahead to China's stock market future, we expect supportive policy stance to continue, providing important support for overall risk asset prices," Bridgewater wrote. "Therefore, we are continuously increasing allocation to a basket of risk assets."

Even after a wave of gains, Chinese stock markets (including A-shares and Hong Kong stocks) remain valued below developed markets like US stocks, making Chinese stocks "attractive from a risk-return perspective," Bridgewater noted.

Morgan Stanley recently stated in a research report that the "deposit migration" wave is expected to continue driving A-share markets toward stronger gains, with theoretically 6-7 trillion yuan in excess term deposits available for reallocation, though large-scale capital inflows into stock markets still depend on sustained market momentum and fundamental improvements.

For A-shares outlook, Morgan Stanley reiterates its "overweight" rating on A-shares since June, predicting the CSI 300 index may advance toward the bull market target of 4,700 points in the near term. As of Wednesday's close, the CSI 300 index closed at 4,459 points.

Goldman Sachs predicts the MSCI China Index, covering core Chinese assets including Alibaba, Tencent, Kweichow Moutai and Yangtze Power, has potential upside of 10%, maintaining a target of 90 points. Goldman expects the significantly risen CSI 300 index still has potential investment returns of about 10%, with a target of 4,900 points, significantly raised from the previous 4,500 points.

Goldman recently stated that a "major driving force" behind stock market gains remains China's retail investor groups with excess savings, and from a longer cycle perspective, Chinese stock markets' net long positions remain at relatively low levels (only 56th percentile over 5-year range), making China's stock market low valuations and increasingly active trading volumes worthy of key attention.