May 9, 2025
We analyze the persistent outperformance of US equities compared to non-US equities, focusing on the drivers of relative performance, including fundamentals and valuations. We examine historical data, valuation trends, and the implications for future returns, highlighting the potential for mean reversion and the benefits of global diversification.
Read moreMay 6, 2025
This article explores why small caps, especially in the international and emerging regions, present a compelling investment opportunity driven by the potential for higher expected market returns, attractive earnings growth, strong diversification benefits, and rich alpha opportunities.
Read moreApril 28, 2025
We provide an overview of the contrasting ways investors form long-run return expectations and examine the tensions between "objective" yield-based expected returns and "subjective" rearview-mirror expectations. We also discuss the dangers of a rearview-mirror mindset and emphasize the importance of forward-looking measures.
Read moreCliff's Perspectives
May 8, 2025
Last month, we posted a short piece critical of options-based strategies such as “defined outcome funds” and “buffered ETFs”. It showed that the vast majority of them failed to deliver either better returns or less-severe drawdowns than a simple combination of passive equities + cash. Since then, we’ve gotten quite a bit of—let’s call it—feedback. My partner Dan, who wrote the original, now writes the devastating response to his predictable critics. My only criticism is he is too kind.
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Strategies
AQR is at the nexus of economics, behavioral finance, data, and technology. Our evolution has been a continuous exploration of what drives markets and how it can be applied to client portfolios.
Investors should conduct their own analysis and consult with professional advisors prior to making any investment decisions. Diversification does not eliminate the risk of experiencing investment loss. Past performance is not a guarantee of future results. Investment process is subject to change.
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