Ray Dalio's Bridgewater: This is not a bubble

Ray Dalio, Bridgewater Associates
Scott Mlyn | CNBC

The largest hedge fund manager in the world is convinced the market is not a bubble about to burst.

"We think asset prices are high and, as a result, the future expected returns of passive investing are likely to be low. But ... we do not see current conditions as a bubble," Greg Jensen and Jacob Kline of Bridgewater Associates wrote in a private note to clients on May 1 obtained by CNBC.com.

Jensen is co-chief investment officer of Bridgewater along with founder Ray Dalio and Bob Prince. The Westport, Connecticut-based firm manages $169 billion for institutional clients like pensions and endowments and its economic views are widely followed and respected.