Bridgewater Associates said in a commentary sent to investors on Tuesday that it believes the sell-off in Japan’s equities the previous day was exaggerated and that the stocks remain somewhat attractive, according to two sources familiar with the letter.
According to the sources, the $112.5 billion global macro hedge fund wrote that, in their opinion, the sell-off looked overdone relative to the change in fundamental conditions.
Global macro hedge funds such as Bridgewater trade across equities, fixed income and commodities in different geographies, betting on global trends.
This strategy along with managed futures funds or commodity trading advisers (CTAs) was a strategy most affected by the recent unexpected rally in the yen, according to hedge fund research firm PivotalPath, as the funds had sizeable bets against the Japanese currencies.