Key Takeaways
- • AQR Capital Management launched the AQR Diversifying Strategies Fund (Class I shares: QDSIX), which began operating on June 8, 2020, as a single-vehicle route to liquid alternatives exposure.
- • The Fund invests in six AQR mutual funds spanning active multi-asset strategies such as risk parity and absolute return strategies such as managed futures.
- • The Fund offers class R6, I and N shares and is designed as a complementary addition to a traditional stock and bond portfolio.
- • AQR reported approximately $143 billion in assets under management as of March 31, 2020, per the firm.
- • The Fund is new with a limited operating history, and its structure carries layered fees and a conflict of interest because it allocates only to AQR funds.
Summary
AQR Capital Management, LLC announced the launch of the AQR Diversifying Strategies Fund (Class I Shares: QDSIX), according to a Business Wire release dated June 8, 2020. The Fund is designed to give investors a single solution for exposure to liquid alternatives with attractive long-term risk-adjusted returns. It does so by investing in a portfolio of AQR's own alternative mutual funds. The firm positions the Fund as a complementary addition to an investor's traditional stock and bond portfolio, offering return sources that are intended to be independent of traditional stock and bond markets.
David Kabiller, Co-Founder of AQR, said the Fund was developed to help investors build an alternatives allocation, which he described as a critical piece of a more stable portfolio. The Fund is managed by AQR's Multi-Strategy team. Ashwin Thapar, Principal at AQR, said the approach is grounded in a systematic and disciplined investment process, with meticulous portfolio construction, risk management and trading.
The Fund gains exposure through two categories of alternative strategies. Active multi-asset strategies, such as risk parity, provide tactical, risk-balanced global market exposure. Absolute return strategies, such as managed futures, seek to harvest established risk premia and access less accessible, more proprietary return sources. The underlying AQR funds are the AQR Multi-Asset Fund, AQR Equity Market Neutral Fund, AQR Global Macro Fund, AQR Managed Futures Strategy HV Fund, AQR Style Premia Alternative Fund and AQR Diversified Arbitrage Fund. The Fund offers class R6, I and N shares.
The release also sets out material risks. The Fund is new with a limited operating history. Because it invests in affiliated funds, shareholders bear both their proportionate share of Fund expenses and the indirect expenses of the underlying funds. The underlying funds may use short sales, futures, forwards, options, swaps and other derivatives that create leverage and the potential for losses exceeding net assets. AQR also discloses a conflict of interest: the Multi-Strategy team limits selection to AQR mutual funds, even where third-party funds may be less expensive or have longer track records, and AQR earns advisory fees from each underlying fund. AQR describes itself as a global investment manager with approximately $143 billion in assets under management as of March 31, 2020, and offices across Greenwich, Bangalore, Boston, Chicago, Frankfurt, Hong Kong, London, Los Angeles and Sydney. The Fund is distributed by ALPS Distributors, Inc.
David Kabiller, Co-Founder of AQR, said the Fund was developed to help investors build an alternatives allocation, which he described as a critical piece of a more stable portfolio. The Fund is managed by AQR's Multi-Strategy team. Ashwin Thapar, Principal at AQR, said the approach is grounded in a systematic and disciplined investment process, with meticulous portfolio construction, risk management and trading.
The Fund gains exposure through two categories of alternative strategies. Active multi-asset strategies, such as risk parity, provide tactical, risk-balanced global market exposure. Absolute return strategies, such as managed futures, seek to harvest established risk premia and access less accessible, more proprietary return sources. The underlying AQR funds are the AQR Multi-Asset Fund, AQR Equity Market Neutral Fund, AQR Global Macro Fund, AQR Managed Futures Strategy HV Fund, AQR Style Premia Alternative Fund and AQR Diversified Arbitrage Fund. The Fund offers class R6, I and N shares.
The release also sets out material risks. The Fund is new with a limited operating history. Because it invests in affiliated funds, shareholders bear both their proportionate share of Fund expenses and the indirect expenses of the underlying funds. The underlying funds may use short sales, futures, forwards, options, swaps and other derivatives that create leverage and the potential for losses exceeding net assets. AQR also discloses a conflict of interest: the Multi-Strategy team limits selection to AQR mutual funds, even where third-party funds may be less expensive or have longer track records, and AQR earns advisory fees from each underlying fund. AQR describes itself as a global investment manager with approximately $143 billion in assets under management as of March 31, 2020, and offices across Greenwich, Bangalore, Boston, Chicago, Frankfurt, Hong Kong, London, Los Angeles and Sydney. The Fund is distributed by ALPS Distributors, Inc.
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