We believe the best way to manage money is to separate investment alpha (value-added return from active management) from beta (return from passively holding a portfolio) and then create optimal portfolios of each. At Bridgewater, we manage money for clients across most major asset classes by replicating a client benchmark and overlying the benchmark with our optimal alpha strategy , Pure Alpha. Clients specify their desired targeted level of risk.
To generate alpha, we follow a fundamental and systematic investment process. By fundamental, we seek to understand the timeless and universal influences on global markets. By systematic, we pre-specify all of our investment criteria, allowing us to debate and test their merits and implement decisions with objectivity and thoroughness. This process gives us the ability to make better decisions and create more diversified portfolios, producing more consistent performance.