Overview
For individuals and their families, wealth compounds after tax. AQR believes that investors have a better chance of meeting their goals when their asset managers take taxes into account. We call this being “tax-aware.”
Source: AQR. All figures are approximate as of 6/30/2024; AUM includes assets managed by AQR and its advisory affiliates.
1. The ~$7.1 billion represents assets invested by our clients (as compared to Regulatory Assets Under Management reported in the Form ADV, which includes the gross market value of all long and short positions in a long-short portfolio).
2. The ~$7.1 billion represents assets invested by our clients in long/short tax-aware private commingled vehicles and separately managed accounts. We also manage ~$11.5 billion in tax aware investments in mutual funds and long-only strategies in separately managed accounts.
New Ways To Compound Wealth
AQR's tax-aware strategies go a step beyond solutions that have long been used by taxable investors.
AQR Flex Separately Managed Accounts (Flex SMAs) are diversified equity portfolios designed to help investors build, diversify, and preserve wealth.
Traditional long-only tax-loss harvesting strategies, like direct indexing, generally realize tax benefits during early years of investment or in falling equity markets. AQR Flex SMAs seek to generate excess returns and tax benefits that are potentially larger and longer lived. Unlike conventional equity strategies, we employ long and short positions, allowing us to unlock more opportunities to realize losses.
Investors may use these strategies in an attempt to:
- Add alpha and gain control over highly appreciated portfolios
- Diversify concentrated asset holdings
- Amplify charitable giving
AQR Tax-Aware Alternatives seek to eliminate the typical tax burden of hedge fund strategies.
By combining alternative strategies with tax-aware implementation, our solutions allow investors to access diversifying strategies in a more tax efficient way. In some cases, tax aware alternatives may even help lower an investor’s overall taxes. We manage a range of investment strategies, including long/short equity, market neutral, trend following, and multi-strategy offerings.
Investors may use these strategies in an attempt to:
- Reduce exposure to equity market risk
- Capture additional sources of return
- Complement existing alternatives allocations
Investment Approach
With an approach rooted in academic exploration, we are committed to ongoing education and continued innovation. We regularly publish research and insights in our Tax-Aware Learning Center.