The Fed’s aggressive rate hikes have cast a giant shadow over the stock market. Among the experts who are sounding the alarm is Ray Dalio, founder of the world’s largest hedge fund Bridgewater Associates.

In a LinkedIn post in June, Dalio warns that Fed’s tightening could lead to stagflation – an economic condition marked by high inflation, but without the robust economic growth and employment that usually come with it.

“[O]ver the long run the Fed will most likely chart a middle course that will take the form of stagflation.” And recently, Bridgewater’s co-chief investment officer Greg Jensen told Bloomberg that the Fed’s hawkish stance still hasn’t been fully priced in.

“In aggregate, let's say asset markets decline at something like 20% to 25%,” he predicts.

If you are wondering what to do given this gloomy outlook, here’s a look at some of the biggest holdings at Dalio’s hedge fund.

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Vanguard FTSE Emerging Markets ETF (VWO)

According to Bridgewater’s latest 13F filing to the SEC, the fund held 15.43 million shares of Vanguard FTSE Emerging Markets ETF at the end of June. With a market value of around $643 million at the time, VWO was the seventh-largest holding in Dalio’s portfolio.

VWO tracks the FTSE Emerging Markets All Cap China A Inclusion Index and provides investors with convenient exposure to stocks in emerging markets like China, Brazil, and South Africa.

The ETF holds more than 5,000 stocks. Its top holdings include industry heavyweights like chipmaking giant Taiwan Semiconductor Manufacturing, Chinese tech behemoth Tencent Holdings, and Indian multinational conglomerate Reliance Industries.

In a recent conversation with another investing legend, Jeremy Grantham, Dalio said he’s looking at countries with good income statements and balance sheets that can weather the storm.

“Emerging Asia is very interesting. India is interesting,” he adds.

Procter & Gamble (PG)

Bridgewater’s largest holding is a defensive stock with the ability to deliver cash returns to investors in different economic environments: Procter & Gamble.

In April, P&G’s board announced a 5% dividend increase, marking the company’s 66th consecutive annual payout increase. The stock currently offers an annual dividend yield of 2.6%.