Billionaire Ray Dalio explains why investors should buy Chinese debt regardless of who wins the election

• Billionaire Ray Dalio told Bloomberg that investors should buy Chinese bonds regardless of who wins Tuesday's election. 
• The Bridgewater Associates founder said no matter who's the next president, the US will run larger deficits and sell more debt, causing global investors who are overweight in US bonds to diversify into China. 
• "I'd much rather own Chinese bonds than US bonds," Dalio said, citing a Chinese currency benefit from increased capital flows.
• Visit Business Insider's homepage for more stories.

NEW LOOK

Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview

Thanks for signing up!

Access your favorite topics in a personalized feed while you're on the go. download the app

Email address

Sign up

By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy. You can opt-out at any time.

Billionaire hedge fund manager Ray Dalio told Bloomberg on Monday that the world is "structurally underweight China" and investors should buy Chinese bonds for diversification no matter the outcome of the US election. 

The Bridgewater Associates founder said that regardless of who wins the presidency, the US will run larger deficits and sell more debt, according to Bloomberg. This will cause global investors who are overweight in US bonds to diversify into China. 

Citing the favorable capital inflows in China, he said: "I'd much rather own Chinese bonds than US bonds." China's 10-year government bonds yield over 3%, while US treasuries yield less than 1%. 

Read more: Leaked documents show Universa Investments made a 105% annual return on capital from 2008 to 2019. Here's a behind-the-scenes look at its 'tail-risk hedging' strategy pioneered by 'Black Swan' investor Nassim Taleb.

Dalio also said he understands the need to have a "significant portion" of a portfolio in China: "The interest-rate differentials are favorable. The growth rate differentials are favorable," he said. 

He added that the Renminbi, the Chinese currency, will become a reserve currency faster than many investors expect. 

"I don't believe the renminbi will be a viable reserve currency quickly," Dalio said. "But I do believe it will happen much faster than anybody expects."