AQR Capital Management, LLC [profile] just launched two "risk parity" mutual funds. The AQR Risk Parity II MV Fund (Class I/QRMIX) and AQR Risk Parity II HV Fund (Class I/QRHIX) are designed to produce risk-adjusted returns while diversifying investors' exposure to equity risk.
According to the company, risk parity funds seek to produce attractive risk-adjusted returns by investing in a globally diversified portfolio of equities, fixed income and commodities. Broadly defined, risk-parity funds balance risks rather than asset classes. A typical risk-parity portfolio begins with less exposure to equities relative to traditional portfolios and invests more in other asset classes. As a result, its risk budget is not concentrated in equities, but spread more evenly across other assets.
"We want to broaden investors' menus by offering a variety of risk exposures that match their risk profile," said David Kabiller, co-founding partner and head of client strategies at AQR. "These funds can help advisors better target their particular risk preference: higher risk and higher potential returns or moderate risk and more moderate returns."
Company Press Release
AQR Capital Management Launches Risk Parity Mutual Funds
GREENWICH, Conn., Nov 05, 2012 -- AQR Capital Management, LLC, ("AQR") announced today the introduction of two mutual funds, AQR Risk Parity II MV Fund (Class I/QRMIX) and AQR Risk Parity II HV Fund (Class I/QRHIX), which begin operation on November 5, 2012, and will be distributed through financial advisors only.
AQR's objective with these new mutual funds is to produce attractive risk-adjusted returns while diversifying investors' exposure to equity risk. The potential investment benefit of risk-parity funds is that they may provide financial advisors with additional investment choices designed to further diversify and help to create more efficient portfolios.
"We want to broaden investors' menus by offering a variety of risk exposures that match their risk profile," said David G. Kabiller, CFA, Co-Founding Partner and Head of Client Strategies at AQR. "These funds can help advisors better target their particular risk preference: higher risk and higher potential returns or moderate risk and more moderate returns."
Risk parity funds seek to produce attractive risk-adjusted returns by investing in a globally diversified portfolio of equities, fixed income and commodities. Broadly defined, risk-parity funds balance risks rather than asset classes. A typical risk-parity portfolio begins with less exposure to equities relative to traditional portfolios and invests more in other asset classes. As a result, its risk budget is not concentrated in equities, but spread more evenly across other assets.
In addition, the new funds offer different levels of target volatility to suit the risk preference of different investors. The AQR Risk Parity II MV Fund targets a moderate annualized level of volatility, 10%, while the AQR Risk Parity II HV Fund aims for a higher target annualized level of volatility, 15%.
AQR launched its first mutual fund on January 9, 2009. Our AQR Funds business has grown to approximately $8 billion as of September 30, 2012, reflecting our expertise in the development of diversifying alternative investment strategies. The firm's total assets under management were approximately $63.9 billion as of September 30, 2012.
About AQR
AQR Capital Management, a global investment-management firm and a leader in risk-parity investing, employs a disciplined and analytical research process to macroeconomic and fundamental data. AQR's diversified offerings range from traditional benchmark-oriented long-only strategies to absolute return alternative strategies. As of September 30, 2012, AQR manages approximately $63.9 billion worldwide for institutional investors, including pensions, insurance companies, endowments, foundations and sovereign wealth funds, as well as registered investment advisors. Founded in 1998, AQR is based in Greenwich, Connecticut, with offices in Chicago, London and Sydney.
Definitions:
Volatility: A statistical measure of the variation in returns for a given security or index.
About AQR Funds
This Fund is not suitable for all investors. An investor considering the Funds should be able to tolerate potentially wide price fluctuations. The Fund may attempt to increase its income or total return through the use of securities lending, and may be subject to the possibility of additional loss as a result of this investment technique. The Fund is new and has a limited operating history.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Fund before investing. To obtain a prospectus containing this and other important information, please call 1-866-290-2688 or visit www.aqrfunds.com to view or download a prospectus online. Read the prospectus carefully before you invest.
As per the prospectus, the investment objective of both the AQR Risk Parity II MV Fund and AQR Risk Parity II HV Fund is total return.
There are risks involved with investing including the possible loss of principal. Past performance does not guarantee future results. AQR Funds are distributed by ALPS Distributors Inc. Clifford Asness and David Kabiller are registered representatives of ALPS Distributors Inc. CFA is a trademark owned by the CFA Institute.[AQR1820, expiration date 11/1/2013.] (C) AQR Funds. All rights reserved.
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