* Bridgewater's Pure Alpha most bearish on developed market
bonds
* Also bearish about the U.S. dollar, metals and stocks
* Euro, Singapore dollar were top bullish views
* Pure Alpha 12% volatility fund gained 2.5% so far this
year

By Nell Mackenzie and Carolina Mandl
       LONDON/NEW YORK, Aug 16 (Reuters) - Bridgewater
Associates' flagship fund had a bearish view on U.S. stocks in
late July just as a rally that saw the benchmark S&P 500 soar
this year was about to lose steam, according to a presentation
to investors seen by Reuters.
    The July 25 investor briefing, a part of which was seen by
Reuters and had not been previously reported, showed the hedge
fund founded by legendary investor Ray Dalio was "moderately"
bearish on U.S. stocks and Treasuries in its Pure Alpha pool.
    A continued rally in stocks forced many hedge funds to
unwind their bets against equities last month. 
    The S&P 500 is up 15.6% year-to-date while the Nasdaq
100 has risen 30.2%, fueled in part by a view that U.S.
growth will stay resilient while inflation cools. Both indexes
have lost 3.4% and 5.2%, respectively, from their recent highs.
    Yields on Treasuries, meanwhile, which move inversely to
bond prices, continue to climb. The yield on the 10-year U.S.
benchmark Treasury on Tuesday hit 4.274%, its highest since
Oct.24. 
    Rising yields can dull the allure of equities by making
bonds look more attractive, while projected company cash flows
are also worth less in current dollars when interest rates rise.
    Bridgewater, which has $125 billion in assets under
management, declined to comment on the presentation about its
Pure Alpha fund, which two sources familiar with the matter said
was hosted online on July 25. It generally keeps any in-depth
views on those assets close to its chest. 
    The fund had bearish positioning in 15 of the 28 assets it
analyzed, including the U.S. dollar, metals and global equities.
It was neutral on five categories, such as emerging market
currencies and equities, euro zone equities and energy,
according to the presentation.
    Its top two bullish bets were on the euro and the Singapore
dollar, while it was moderately positive about the Mexican peso
and inflation-linked bonds.
    
    US BOND MARKET LIQUIDITY
        Bridgewater actively bets on the direction of various
types of securities — including stocks, bonds, commodities and
currencies — by predicting macroeconomic trends.
    Greg Jensen, Bridgewater's co-chief investment officer,
offered a rare glimpse into some of the fund's views on U.S.
asset prices in an Aug. 4 podcast posted on the firm's website.
He said that liquidity in the U.S. government bond market was
getting worse, as the Treasury increases bond issuance. The
higher Treasury issuance is likely to depress asset prices, he
added.
    Bridgewater's Pure Alpha 12% volatility fund gained 2.5% in
the year through Aug. 11, a third source familiar with the
matter said, while the Defensive Alpha fund, less dependent on
equities, rose 2.1%. Since it was launched in 1991, Pure Alpha
12% has generated 7.7% net total returns annually, according to
the same source.
    The All Weather strategy, a multi-asset investment approach
structured to be indifferent to shifts in economic conditions,
was up 3.8% in the same period, the person added.
    Macro hedge funds, caught off guard in their rate bets
during the banking crisis in March, have seen their performance
dip 0.36% on average in the year through July, the latest data
from Hedge Fund Research (HFR) shows.
     
  Here are Pure Alpha's views:  
    
                                       
 Asset          Bearish     Neutral     Bullish
                                       
               Moderate                
 USD x DMFX                            
                                       
                                       Strongly
 EUR x DMFX                            
                                       
                                       Slightly
 JPY x DMFX                            
                                       
               Strongly                
 AUD x DMFX                            
                                       
               Strongly                
 CAD x DMFX                            
                                       
                               X       
 EM x DMFX                             
                                       
               Strongly                
 Korean Won                            
                                       
                                       Moderately
 Mexican Peso                          
                                       
                                       Strongly
 Singapore                             
 Dollar                                
                                       
                               X       
 Short Rates                           
 Developed                             
 World                                 
               Moderately              
 Bonds USA                             
                                       
               Moderately              
 Bonds UK                              
                                       
               Moderately              
 Bonds DE                              
                                       
               Strongly                
 Bonds                                 
 Developed                             
 Markets                               
                                       
                                       Moderately
 Inflation-li                          
 nked Bonds                            
 Developed                             
 World                                 
                                       
               Slightly                
 Equities                              
 Global                                
                                       
               Moderately              
 Equities USA                          
                                       
                               X       
 Equities                              
 Eurozone                              
                                       
                                       Slightly
 Equities                              
 Japan                                 
                                       
                               X       
 Equities                              
 Emerging                              
 Markets                               
                                       
               Slightly                
 Precious                              
 Metals                                
                                       
                               X       
 Energy                                
                                       
               Slightly                
 Industrial                            
 Metals                                
                                       
               Slightly                
 Credit                                
 Developed                             
 Corporate                             
                                       
               Moderately              
 Credit                                
 Developed                             
 Sovereign                             
                                       
                                       Slightly
 Cash USA                              
                                       
                                       Moderately
 Cash                                  
 Eurozone                              
                                       
               Moderately              
 Cash Japan                            
                                       
 
 (Reporting by Nell Mackenzie in London and Carolina Mandl in
New York; editing by Ira Iosebashvili, Michelle Price and Emelia
Sithole-Matarise)