Overview

Why Allocate to Alternatives

Many investors look to alternative strategies to help diversify and complement traditional portfolios. An alternative allocation may help investor portfolios achieve more consistent long-term performance.

Lower Volatility
Alternatives tend to perform well in various market environments due to their reduced sensitivity to traditional stock and bond market movements, potentially providing investors with a smoother ride.
Compounded Wealth
Alternatives may provide investors with an additional opportunity for positive returns that are not accessible through traditional investments.
Portfolio Diversification
As alternatives seek returns that are independent from stock and bond markets, they may strengthen  investor portfolios in periods of market turbulence.

Hypothetical Growth of $1,000

January 1, 1990 – December 31, 2024

Hypothetical Growth of $1,000 for Traditional 60/40 Portfolio compared to Diversified 40/40/20 Portfolio. Since 1990, the Diversified Portfolio has outperformed.

Source: AQR, Bloomberg, Barclays, HFRI. Stocks are represented by the MSCI World Index, Bonds by the Bloomberg Barclays U.S. Aggregate Index, and Alternatives by the HFRI Fund Weighted Composite Index. The Diversified Portfolio is 40% Stocks, 40% Bonds, 20% Alternatives. The portfolios shown are intended for informational purposes and do not represent actual results of any product or strategy managed by AQR.

*Risk is defined as volatility or standard deviation, a statistical term that measures the amount of variability or dispersion around an average (A higher value indicates higher risk).

Data is presented gross of any fees, with the exception of data based on the HFRI Fund Weighted Composite Index, which is a net of fee index. Had fees for the other indices been included, performance would have been lower. Time period chosen based on the 01/01/1990 inception of the HFRI Fund Weighted Composite Index. The portfolios were rebalanced monthly. Past performance is not a guarantee of future performance. Diversification does not eliminate the risk of experiencing investment losses. Indices are unmanaged, and one cannot invest directly in an index.

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Alternative Investing at AQR

Our Experience

AQR is a leader in alternatives with 30 years of research and experience managing alternative strategies. The ideas that serve as the foundation of AQR’s investment philosophy were born in academia and our commitment to research and innovation continues to shape our approach to alternative investing.

 

Our Approach

AQR alternatives use a disciplined, systematic approach designed to deliver long-term value throughout market cycles. We invest across asset classes, geographies, and markets, using hundreds of investment signals. We are constantly enhancing our strategies and developing innovative solutions for our client’s investment objectives. Our strategies may address a wide range of investor challenges, potentially offering stronger diversification, downside protection, and capital efficiency.

Explore Our Registered Funds

 

Diversification does not eliminate the risk of experiencing investment losses.

Broad-based securities indices are unmanaged and are not subject to fees and expenses typically associated with managed accounts or investment funds. Investments cannot be made directly in an index.

The MSCI World Index is a broad global equity index that represents large and mid-cap equity performance across 23 developed markets countries. It covers approximately 85% of the free float-adjusted market capitalization in each country and does not offer exposure to emerging markets.

The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency).

The HFRI Fund Weighted Composite Index is a global, equal-weighted index of over 1,500 single-manager funds that report to HFR Database. Constituent funds report monthly net of all fees performance in US Dollar and have a minimum of $50 Million under management or a twelve (12) month track record of active performance. The HFRI Fund Weighted Composite Index does not include Funds of Hedge Funds.

No representation is being made that any investment will achieve performance similar to those shown. For illustrative purposes only and not representative of a portfolio AQR currently manages.