AQR White Paper
Diversified growth funds, or DGFs, have generally met their return targets over the past five years, but they’ve too often relied on similar risk exposures as a traditional 50%/50% stock/bond portfolio to drive performance. An issue with this approach is that the next five years are unlikely to be as favorable for traditional portfolios as the last five years have been, which could be a headwind for DGF performance.
Our total return alternative strategy embraces a different approach, incorporating a far wider range of return sources – not only a more comprehensive set of market risk premia, but also alternative risk premia and alpha – with less reliance on rising prices for traditional assets.
We believe that aggressive diversification across a broad range of intuitive, empirically-tested return sources may benefit investors seeking returns that are also diversifying to the rest of their portfolios.
To request a copy of this paper, please contact us.