AQR Capital Management Launches Risk Parity Fund
05 October 2010 Connecticut
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AQR Capital Management, LLC, ("AQR") has launched the AQR Risk Parity Fund (AQRNX, Class N Shares), the newest addition to its mutual fund family. The new no-load mutual fund, open to retail and institutional investors, began operations on October 1, 2010 with a USD10 million investment by AQR. The Fund's investment objective is to seek consistent total returns with reduced equity market exposure by means of a risk parity asset allocation strategy.
The AQR Risk Parity Fund may offer investors an opportunity to achieve a more diversified portfolio that provides more consistent returns over time by focusing on the allocation of risk rather than the allocation of capital - which is the traditional approach. The goal is to lower investors' exposure to equity risk and reduce tail risk or volatile downswings.
"We believe it provides more meaningful diversification and consistent returns over time than traditional approaches, a portfolio that is more robust in different economic environments, and an opportunity to improve the risk/return characteristics of an overall portfolio through enhanced returns and reduced risks," said David G. Kabiller, CFA, Founding Principal and Head of Client Strategies at AQR.
Risk parity strategies may provide improved risk diversification by investing across a broad range of assets to ensure no single asset class dominates the portfolio's expected performance. The asset allocation is driven by forecasting risk and by increasing exposure to less volatile assets, such as bonds and credit, while decreasing exposure to higher volatility assets such as stocks and commodities. The Fund utilizes futures contracts and related instruments to achieve its objectives.
AQR's Risk Parity Fund uses a risk budgeting approach to combine a large number of liquid assets into a diversified portfolio, aiming to provide more consistent positive total returns. The fund gives investors access to a broad range of global capital markets, representing over 70 individual exposures across many asset classes using liquid, cost effective instruments to maximize diversification. The strategy seeks to offer investors exposure to a number of global equity, fixed income, commodity, currency, and credit markets.
"The launch of the Risk Parity Fund demonstrates AQR's commitment to providing innovative products to mutual fund investors that have previously been available only to large institutions," said Kabiller. "AQR is uniquely positioned to respond to the demand by the financial advisor community for an expanded range of portfolio diversification strategies."
The AQR Risk Parity Fund's Class N shares have a net expense ratio of 1.20%, a gross expense ratio of 1.40%, and will be traded under the ticker AQRNX.
Note:
This Fund is not suitable for all investors. The Funds may attempt to increase its income or total return through the use of securities lending, and they may be subject to the possibility of additional loss as a result of this investment technique. The Fund is new and has less than a year of operating history.
The AQR Risk Parity Fund may offer investors an opportunity to achieve a more diversified portfolio that provides more consistent returns over time by focusing on the allocation of risk rather than the allocation of capital - which is the traditional approach. The goal is to lower investors' exposure to equity risk and reduce tail risk or volatile downswings.
"We believe it provides more meaningful diversification and consistent returns over time than traditional approaches, a portfolio that is more robust in different economic environments, and an opportunity to improve the risk/return characteristics of an overall portfolio through enhanced returns and reduced risks," said David G. Kabiller, CFA, Founding Principal and Head of Client Strategies at AQR.
Risk parity strategies may provide improved risk diversification by investing across a broad range of assets to ensure no single asset class dominates the portfolio's expected performance. The asset allocation is driven by forecasting risk and by increasing exposure to less volatile assets, such as bonds and credit, while decreasing exposure to higher volatility assets such as stocks and commodities. The Fund utilizes futures contracts and related instruments to achieve its objectives.
AQR's Risk Parity Fund uses a risk budgeting approach to combine a large number of liquid assets into a diversified portfolio, aiming to provide more consistent positive total returns. The fund gives investors access to a broad range of global capital markets, representing over 70 individual exposures across many asset classes using liquid, cost effective instruments to maximize diversification. The strategy seeks to offer investors exposure to a number of global equity, fixed income, commodity, currency, and credit markets.
"The launch of the Risk Parity Fund demonstrates AQR's commitment to providing innovative products to mutual fund investors that have previously been available only to large institutions," said Kabiller. "AQR is uniquely positioned to respond to the demand by the financial advisor community for an expanded range of portfolio diversification strategies."
The AQR Risk Parity Fund's Class N shares have a net expense ratio of 1.20%, a gross expense ratio of 1.40%, and will be traded under the ticker AQRNX.
Note:
This Fund is not suitable for all investors. The Funds may attempt to increase its income or total return through the use of securities lending, and they may be subject to the possibility of additional loss as a result of this investment technique. The Fund is new and has less than a year of operating history.
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