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Perspective

Should Hedge Funds Hedge?: Why Some Alts Should Have a Beta of 1.0

March 28, 2025 - Cliff Asness

While uncorrelated alternatives can be beneficial, they often fail to significantly impact the overall portfolio. Here, I argue that adding beta to these alternatives can enhance capital efficiency and improve long-term returns. Ultimately, there is a need for a balanced approach to investing in alternatives, including a combination of aggressive and equitized strategies.

Perspective

Rebuffed: A Closer Look at Options-Based Strategies

March 21, 2025 - Cliff Asness Daniel Villalon

Options-based strategies, often labeled with words like “Buffered,” “Overlay,” and “Defined Outcome” have amassed a sizeable chunk of investors’ money, lured by the promise of market-like returns with less risk. These strategies use options to capture the upside or downside of an asset’s returns, and managers who employ a mix of options can tailor an asset’s risk/return profile to align with an investor’s goals. But can they actually deliver?

Perspective

2035: An Allocator Looks Back Over the Last 10 Years

January 2, 2025 - Cliff Asness

Well, sitting here in the year 2035 and looking back at our endowment’s returns for the last decade is not a pleasant task. World markets have been subpar and our performance relative to world markets has been simply terrible. Hard times are never pleasant. But they have one upside. We can learn from them.

Perspective

In Praise of High-Volatility Alternatives

September 4, 2024 - Cliff Asness

This note argues that good higher-volatility alternative investments, that are indeed often very hard to stick with, can be important tools in constructing the best overall portfolio. I think if (a big if) investors can stick with them, they are often a more effective tool than their lower-volatility cousins. Basically, I think they are underutilized

Perspective

The Less-Efficient Market Hypothesis

September 3, 2024 - Cliff Asness

I argue that over the past 30+ years markets have become less informationally efficient in the relative pricing of common stocks, particularly over medium horizons

Journal Article

CIO Perspectives: An Interview with Cliff Asness

September 1, 2024 - Cliff Asness

In a wide ranging interview, AQR managing principal Cliff Asness discusses many aspects of AQR’s investment philosophy and approach from the perspective of a CIO – how we adapt our process to changing market conditions, how we think about adding innovative technology such as machine learning to our process, and more.

The President’s Trophy Curse

May 20, 2024 - Cliff Asness

Continuing my occasional foray into sports analytics, in this post I look at the President's Trophy curse. This ubiquitous observation can be summed up as “the winner of the President’s Trophy, awarded for the best record in the regular season, usually doesn’t go on to win the Stanley Cup. Thus, winning the trophy is cursed.” The President’s Trophy winner usually doesn’t win The Cup. It’s true, and yet it’s still really dumb.

Perspective

Cognitive Dissonance

April 1, 2024 - Cliff Asness

My latest covers a few things I would’ve thought were hard for investors to believe at the same time. Experience has proven me quite wrong.

Perspective

Why Not 100% Equities

February 12, 2024 - Cliff Asness

Recently, a new paper has been making a big splash in our small pond of academic/quant investing. By “new,” I just mean “recently written,” as much of it ain’t new. In this piece, I offer a concise (relative to my norm) rebuttal, as this is well-trod ground.

Perspective

Opining for the 10th Time

October 9, 2023 - Cliff Asness

I just published my 10th op-ed in The Wall Street Journal. This one is on the movie “Dumb Money” and, more importantly, the broader implications of the meme stock craze for today’s society as a whole. I thought it would be fun to put all ten op-eds out together. Be forewarned – if you aren’t a U. Chicago free marketer, you may not like them all.