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Alternative Thinking
2026 Capital Market Assumptions for Major Asset Classes
January 14, 2026
We update our estimates of medium-term (5- to 10-year) expected returns for major asset classes. We also include a discussion on currency risk and currency hedging, with particular considerations for U.S. and European investors.
Alternative Thinking
Hold the Dip
December 1, 2025
We examine the popular “Buy the Dip” strategy and find it consistently underperforms a simple buy-and-hold approach. Our research shows that investors seeking to time markets may find greater success following trends rather than fighting them.
White Paper
Diversifying Alternatives and the Rearview Mirror
November 3, 2025
Part 10: This paper examines how investor biases and performance-chasing behaviors can undermine the benefits of long/short diversifying alternatives. We explore why such strategies often feel disappointing in bull markets, yet remain vital for long-term portfolio resilience.
Alternative Thinking
Exploring Capital Efficiency
September 15, 2025
This paper explores how capital-efficient investments—such as private equity, hedge funds, and portable alpha—can help investors unlock the full benefits of diversification without relying on direct leverage. We show how these approaches can improve portfolio resilience and long-term returns, particularly for leverage-constrained investors.
Alternative Thinking
The Hidden Value of Streaky Returns in Stock Portfolios
June 3, 2025
Streaky return streams - ones that that can perform well or poorly for extended periods - are challenging for investors to comprehend and stick with. Yet, this very "complexity risk” may be what earns investors an additional risk premium, leading to above average risk-adjusted returns.
Perspective
Should Hedge Funds Hedge?: Why Some Alts Should Have a Beta of 1.0
March 28, 2025
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.
Alternative Thinking
2025 Capital Market Assumptions for Major Asset Classes
January 16, 2025
We update our estimates of medium-term (5- to 10-year) expected returns for major asset classes. We also include a discussion on corporate earnings growth: the market consensus is for more strong growth to come – especially in the U.S. But what is a reasonable medium-term forecast for allocators?
Perspective
In Praise of High-Volatility Alternatives
September 4, 2024
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
Journal Article
CIO Perspectives: An Interview with Cliff Asness
September 1, 2024
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.
Alternative Thinking
2024 Capital Market Assumptions for Major Asset Classes
January 16, 2024
We update our estimates of medium-term (5- to 10-year) expected returns for major asset classes. We also include a section on estimating expected returns and risk for private credit, as well as a feature on the key decisions that underpin any capital market assumptions framework.