Ray Dalio's All Weather portfolio allocation

Ray Dalio's All Weather portfolio allocation balances growth and inflation risks; the ALLW ETF reported notional exposure totalling 183.5% of fund value at 30 September 2026. The largest exposure was 70.7% in nominal government bonds, followed by 43.6% in equities. The famous 30/40/15/7.5/7.5 portfolio is a simplified, unlevered version published in a 2014 Tony Robbins book, not Bridgewater's fund.

Key takeaways

1. All Weather balances risk, not capital. Bridgewater describes it as four portfolios with the same risk, each built to do well when growth or inflation rises or falls relative to expectations.
2. Leverage is part of the design. Dalio's 2011 paper says All Weather "leverages up low risk assets" and puts the strategy at around 2 times leveraged.
3. The 30/40/15/7.5/7.5 mix is the Robbins version. It omits leverage and inflation-linked bonds, and all its bonds are US Treasuries.
4. ALLW discloses a leveraged allocation. At 30 September 2026, ALLW held 70.7% nominal government bonds, 43.6% equities, 36.5% inflation-linked bonds and 32.7% commodities in notional terms.
5. Risk balance is not a geometric-growth objective. Copio tests whether cost-controlled crash protection supports growth exposure and improves whole-portfolio compounding after costs.

What is Ray Dalio's All Weather strategy?

All Weather is a strategic allocation designed to balance exposure to growth and inflation surprises. It can still lose money. According to The All Weather Story (Bridgewater, January 2012), it launched in 1996 and was originally created for Dalio's trust assets. The founding question was what portfolio "would perform well across all environments, be it a devaluation or something completely different?"

The same paper places All Weather after Pure Alpha, Bridgewater's active strategy, which launched in 1991. All Weather is the passive, or beta, side of Bridgewater's thinking. The term "risk parity" came later: the paper credits a consultant with adopting it after the 2008 credit crisis.

Reuters reported on 31 July 2025 that he sold his remaining stake in Bridgewater, having handed over control in 2022.

What are the four economic environments?

Bridgewater reduces economic surprises to two drivers, growth and inflation, each of which can rise or fall relative to what markets expect. The 2012 paper says All Weather is "as simple as holding four different portfolios each with the same risk."

The mapping reproduces the four-box diagram in the 2012 paper, which puts 25% of risk on each environment. A 1990 Bridgewater memo quoted in the 2012 paper says bonds perform best in a disinflationary recession and stocks in periods of growth. The paper says inflation-linked bonds "play an important role in All Weather", and that Bridgewater's 1997 recommendations shaped how US Treasury Inflation-Protected Securities (TIPS) were designed.

Why does All Weather balance risk instead of capital?

A portfolio split by money is usually dominated by its most volatile asset, so All Weather sizes positions by risk. The 2012 paper gives the arithmetic in a footnote: $10 in the S&P 500 and $10 in US bonds is a portfolio whose risk is dominated by stocks, while $5 in stocks and $15 in 10-year bonds is better balanced. In Bridgewater's illustration, leverage raises the second mix's expected return while diversification lowers its estimated risk. That result depends on the assumed returns and correlations.

Dalio's Engineering Targeted Returns and Risks (August 2011 reprint of a 2004 article) explains why. He writes that a traditional institutional portfolio is typically about 95% correlated with equities, because most of the money is in stocks and stocks are far more volatile than the rest. His answer is to make assets "competitive" with each other through leverage.

Page 11 of the paper states the mechanism directly: All Weather "leverages up low risk assets and deleverages high risk assets" so that expected returns and risks are roughly similar. Dalio puts the strategy at "around 2 times leveraged" and argues that diversification removes more risk than leverage adds. The 2012 paper adds that "Leverage is an implementation tool." The risk Dalio names in return is that the other asset classes, on average, underperform cash.

AQR reached a similar conclusion from a different starting point; see how Cliff Asness approaches risk parity.

Is the 30/40/15/7.5/7.5 portfolio Ray Dalio's All Weather?

No: the widely shared mix comes from Tony Robbins' book Money: Master the Game (Simon & Schuster, 2014), where Robbins calls it the "All Seasons" portfolio. In an excerpt republished on Yahoo Finance on 18 November 2014, Robbins says he asked Dalio for percentages an individual could hold "without any leverage." Robbins writes that Dalio simplified the strategy "by taking out the leverage."

Published November 2014: long-term Treasuries 40%; stocks 30%; intermediate Treasuries 15%; gold 7.5%; commodities 7.5%. Source: Tony Robbins excerpt, Yahoo Finance, 18 November 2014; chart data (CSV). These are capital weights for a retail, unlevered version described by Robbins. They are not a Bridgewater disclosure, and we found no Bridgewater publication that gives them.

The excerpt defines long-term bonds as 20- to 25-year Treasuries and intermediate bonds as 7- to 10-year Treasuries. Robbins also reports a backtest his own investment team showed him: 9.72% a year net of fees from 1984 to 2013, with a worst year of -3.93% in 2008. That is a hypothetical result over one period, not the record of any fund.

The Robbins mix holds no inflation-linked bonds and no leverage, and all its bonds are US Treasuries, so its bonds cannot be scaled up to match equity risk the way the 2011 paper describes. Its balance rests on a 55% capital weight in US Treasuries, most of it long-dated.

What does the All Weather ETF (ALLW) hold?

ALLW is a publicly traded implementation of All Weather: Bridgewater supplies a daily model portfolio and State Street's SSGA Funds Management trades the instruments. The fund began trading on Nasdaq on 6 March 2025, charges a 0.85% gross expense ratio and had $1,840.5 million in assets on 26 October 2026, according to State Street's fund page. State Street says the model typically targets annualised volatility of 10% to 12%.

At 30 September 2026: US nominal government bonds 36.3%; non-US nominal government bonds 34.4%; US inflation-linked bonds 36.5%; US equities 13.6%; non-US equities 30.0%; broad commodities 23.1%; gold 9.6%; total 183.5% of fund value. Source: State Street, ALLW Asset Class Exposure, 30 September 2026, p. 1; chart data (CSV). Non-US rows are our sums of State Street's regional rows; notional exposure is not the same as risk. State Street's fact sheet for the same date shows 41.47% in inflation-linked bonds, against 36.5% in the exposure document used here.

The holdings file shows how the leverage is built. On 26 October 2026, a State Street government money market fund was the largest line at 33.84% of the fund, followed by an S&P 500 ETF at 13.36% and a run of TIPS (daily holdings). Bond, equity-index and gold futures plus a commodity-index swap then add exposure on top of that cash.

ALLW returned 12.08% a year at NAV from inception to 30 September 2026, against 21.24% for its MSCI ACWI IMI equity benchmark, per State Street. The benchmark has different equity exposure and risk, so the return gap alone does not measure the success of the risk-balancing approach.

Bridgewater's quarterly 13F aggregates reportable holdings across mandates. For 30 June 2026 it listed 997 entries with a total value of $24.4 billion, with the largest an S&P 500 ETF at 16.3% of reported 13F value (filing). A 13F mainly covers US-listed long equities and certain listed options, filed up to 45 days after quarter end, and excludes shorts, cash, most bonds, futures, currencies, most non-US holdings and private investments, so it cannot show All Weather.

What happened to All Weather in 2022?

2022 brought rate rises that hit bonds hard, the asset All Weather levers up to balance its equities. Bloomberg reported in April 2024, citing Bridgewater slides shown to the Indiana Public Retirement System, that All Weather's most popular version, targeting 10% volatility, lost 22% in 2022. Bloomberg wrote that when the Federal Reserve started raising rates in 2022, bonds tumbled before most risk parity models could react. Our article on bonds when interest rates rise shows how duration drove bond losses in 2022.

In the 2011 paper, Dalio called the financial crisis the "acid test" and reported a simulated gain of 43.2% for the All Weather asset mix from July 2007 to August 2011, noting that Bridgewater's own returns deviated from it. Dalio says Treasury bonds offset much of the equity loss during the financial crisis; the quoted simulation covers a longer period through August 2011.

Bridgewater's own September 2025 paper, A New Era of Higher Inflation Risks, says the pandemic-era inflation flipped the negative stock-bond correlation of the 2000s and 2010s. It argues that most portfolios remain concentrated in stocks and bonds, both of which underperform during inflation spikes. The 1970s offer a longer example of the same problem.

Is All Weather a conservative asset allocation?

All Weather balances economic risks, but a balanced risk budget does not establish the highest expected geometric growth. ALLW's September 2026 notional exposure totalled 183.5% of fund value, while the unlevered Robbins mix put 55% of capital in Treasuries. Holding fewer equities cushions their losses; bonds can also gain when rates fall, but that response depends on the shock. Neither mechanism supplies a contractual equity-crash payoff.

At copio, the research objective is to maximise expected long-term geometric growth within the investor's spending needs and capacity for loss. We believe a growth portfolio with cost-controlled convex protection offers another route: retain productive exposure and generate gains during a covered crash that can fund reinvestment. The comparison must include premiums, financing, trading costs and the return forgone through lower growth exposure. Our conservative asset allocation guide sets out this whole-portfolio test.

What can an individual investor learn from Ray Dalio?

Dalio's core point is that capital weights hide where risk sits. A useful first question is which single economic surprise would cause the largest loss in your own portfolio: weaker growth, faster inflation, or both at once.

A second is whether any holding tends to rise when inflation surprises upwards. Dalio himself told the Greenwich Economic Forum in October 2025 that, from a strategic allocation perspective, an optimal mix might hold "something like 15% of your portfolio in gold" (Fortune, via Yahoo Finance). That is his view, more than the 7.5% in the Robbins mix or the 9.6% gold exposure in ALLW at 30 September 2026. For another manager's ranking of inflation hedges, see Paul Tudor Jones.

A third is how your assets have moved together in past crises. Our analysis of asset class correlations shows how those relationships shift over time. All Weather relies on leverage, derivatives and a model updated daily, so copying its percentages without those tools produces a different portfolio.