ÿþ<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"> <html> <head> <title>AQR Capital</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> <META NAME="TITLE" CONTENT="AQR Capital"> <META NAME="AUTHOR" CONTENT="XCELLENCEIT"> <META NAME="COPYRIGHT" CONTENT="XCELLENCEIT"> <META NAME="KEYWORDS" CONTENT="AQR, CAPITAL"> <META NAME="DESCRIPTION" CONTENT="AQR, CAPITAL, NEWS, INFO"> <META NAME="GENERATOR" CONTENT="crimson"> <META NAME="ROBOTS" CONTENT="index"> <link href="layout/css/default.css" rel="stylesheet" type="text/css"> </head> <body bgcolor="#DCDFE6"> <table width="100%" height="100%" border="0" cellspacing="0" cellpadding="0"> <tr> <td align="center" valign="middle"> <table border="0" cellspacing="0" cellpadding="0" height="100%"> <tr> <td align="right" valign="bottom"><img src="layout/bara_sus1.jpg" width="7" height="7"></td> <td class="top">&nbsp; </td> <td align="left" valign="bottom"><img src="layout/bara_sus2.jpg" width="7" height="7"></td> </tr> <tr> <td width="12" class="left" rowspan="4">&nbsp; </td> <td width="776" height="107" background="layout/en/header1.gif">&nbsp; </td> <td width="13" class="right" rowspan="4">&nbsp; </td> </tr> <tr> </tr> <tr> <td width="776" height="100%"><table border="0" cellspacing="0" cellpadding="0" height="100%"> <tr height="5" bgcolor="#d7def1"><td colspan="3">&nbsp; </td> </tr> <tr> <td align="center" colspan="2"> <img src="layout/en/rb_15iun_04.jpg" border="0" width="776" height="64" alt="research"> </td> </tr> <tr> <!-- the following bgcolor is the left menu column original color was #f0f0f0 !--> <td width="220" height="100%" valign="top" bgcolor="#e5e5e5"> <ul style="list-style:none;padding-top:30px"> <li class="space"><a href="home.htm" class="leftmenblu" >HOME</a> </li> <li class="space"><a href="about.htm" class="leftmenblu" >ABOUT AQR</a> </li> <!--<li class="space"><a href="http://www.google.com" class="leftmenred" >Search Google</a></li>--> <li class="space"><a href="principal_bios.htm" class="leftmenblu" >PRINCIPAL BIOS</a> </li> <li class="space"><a href="research.htm" class="leftmenred" >RESEARCH LIBRARY</a> <li class="space"><a href="RecruitingHome.htm" class="leftmenblu" >CAREER OPPORTUNITIES </a> </li> </li> <li class="space"><a href="legal.htm" class="leftmenblu" >LEGAL </a> </li> <li class="space"><a href="contact.aspx" class="leftmenblu" >CONTACT US</a> </li> <li class="space"><a href="directions.htm" class="leftmenblu" >DIRECTIONS</a> </li> </ul></td> <td width="556" height="100%" bgcolor="white" valign="top"> <table cellpading=0 cellspacing=0 border=0><tr><td style="padding:25px;" valign="top"> <span class="titlu_negru"> <font size="3" color="black" type="">Is Alpha Just Beta Waiting To Be Discovered?</font> </span> <br /> <span> <font size="2" color="black" type="">What the Rise of Hedge Fund Beta Means for Investors</font> </span> <br /><br /><br /> <!--span class="titlu_albastru">Summary</span><br /><br /--> <span class="scris_gri"> <b>Alpha is shrinking, and it s good news for investors.</b> This idea may seem paradoxical. But alpha is really just the portion of a portfolio s returns that cannot be explained by exposure to common risk factors (betas). With the emergence of new betas, the unexplained portion (alpha) shrinks  alpha gets reclassified as beta. The rise of a group of risk factors we call hedge fund betas makes this transformation especially relevant today.<br /><br /> <b>Hedge fund betas</b> are the common risk exposures shared by hedge fund managers pursuing similar strategies. We believe these risk factors can capture not just the fundamental insights of hedge funds, but also a meaningful portion of their returns. Hedge fund betas are available for investment and can also be used to enhance portfolio construction and risk management.<br /><br /> <b>Ultimately</b>, we believe the rise of hedge fund betas will lead not only to the reclassification of alpha, but also to better-diversified portfolios with greater transparency, improved risk control, and  perhaps most importantly  higher net returns.<br /><br /> </span><br /><br /><b><font color="black">For a copy of this paper, please click here: </font><a href="contact.aspx?link_id=15" class="download_link">Is Alpha Just Beta Waiting To Be Discovered?</a><br /></b></td></tr></table> </td> </tr> <tr bgcolor="#d7def1" height="15"><td colspan="2">&nbsp; </td></tr></table></td></tr> <tr> <td bgcolor="#b0b3ba" style="padding-top:2px;padding-right:10px;" align="right" valign="top"> <a href="home.htm" class="white">HOME</a><font color="white">|</font> <a href="about.htm" class="white">ABOUT AQR</a><font color="white">|</font> <a href="principal_bios.htm" class="white">PRINCIPAL BIOS</a><font color="white">|</font> <a href="research.htm" class="white">RESEARCH LIBRARY</a><font color="white">|</font> <a href="RecruitingHome.htm" class="white">CAREER OPPORTUNITIES </a><font color="white">|</font> <a href="contact.aspx" class="white">CONTACT US</a><font color="white">|</font> <a href="directions.htm" class="white">DIRECTIONS</a></td> </tr> <tr> <td align="right" valign="top"><img src="layout/bara_sus3.jpg" width="7" height="7"></td> <td align="right" style="padding-right:20px;" class="copyright1">2004 &copy; AQRCapital.com. 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