AQR Capital Management

Our first post in this series showed the power of deferral for building wealth; our second showed how robust the value of deferral is to changes in future tax rates on capital gains; our third considers whether deferral is still the right choice if an investor is able to find a strategy with a higher expected return. Here, we build on Part 3 by adding a tool investors and advisors increasingly have access to: tax-aware transition. https://bit.ly/4hkMhyA

2025 is off to a turbulent start, with geopolitics and elevated macroeconomic uncertainty driving market volatility. Historically, such environments have been challenging for equities. However, there are ways investors may be able to protect their portfolios. Investors could consider adding exposure to alternatives, particularly those that tend to perform well during periods of elevated volatility and equity market underperformance: ? Trend Following: Tends to deliver strong performance in challenging periods for markets that are preceded by fundamental catalysts. ? Multi-Strategy: Tends to deliver strong risk-adjusted returns by combining return sources that are both diversifying to each other and lowly correlated to markets. For the foreseeable future, it appears the only certainty is uncertainty.

Our first post in this series showed the power of deferral for building wealth, and our second showed how robust the value of deferral is to changes in future tax rates on capital gains. But what if you’re able to find a new investment with a higher expected return? Here, we look into how much of a return advantage your next investment needs to have to offset the value of gain deferral in your current portfolio. https://bit.ly/3FqnLPj

We're excited to connect with our partners here at the 2025 Forbes | SHOOK Top Teams Summit! If you're attending this year, please be sure to visit us in the Exhibitor Area to learn more about AQR's innovative strategies and connect with our team.

We were thrilled to recently host our 2025 London Forum. The event sparked insightful discussions on navigating today's dynamic landscape, covering key topics such as market concentration, machine learning in finance, political uncertainty, and trends in asset allocation. Thank you to all our attendees and participants for making this event a success!

As stock market valuations continue to rise and expected returns correspondingly fall, many investors are hoping to rely more on alpha from active management to make up for a potential future return gap. Unfortunately, long-only active management has struggled during recent history. We review why portable alpha may be an attractive alternative solution in today’s market environment. We also discuss what aspects of a portable alpha solution are important for investors to consider when selecting between implementations. Learn more: https://bit.ly/3D8lmrC

During our 2025 Outlook webinar, Pete Hecht discussed our Capital Market Assumptions before fielding a question on how an investor may address the return gap. His response? More investors are turning to portable alpha to add diversified, higher quality alpha to long-only mandates. For more on our Capital Market Assumptions: https://bit.ly/430Zw3F To learn more about Portable Alpha: https://bit.ly/410B3sV

Diversification is a timeless strategy that helps manage risk and enhance returns. As Jordan Brooks explained during our Outlook 2025 webinar, with US equity valuations currently at high levels, now may be an especially attractive time to consider broader asset allocation. Different asset classes respond differently to various macroeconomic environments—positioning a portfolio correctly could make all the difference.

At AQR, we’re constantly trying to push the envelope on new techniques that we use to build our models, develop new signals, and express the information we have across different trading environments. During our recent 2025 Outlook webinar, Bryan Kelly, Head of Machine Learning, highlighted AQR’s innovative approach to integrating cutting-edge machine learning into our investment process. Learn more: https://bit.ly/4jNkut3

Equity market concentration and technological innovation are two hot topics for active equity investors today. This paper explores both. First, we address the challenges of investing in concentrated markets, and discuss how this environment is impacting different approaches to active management. Second, we explore the role of new technologies, such as large language models and machine learning, and alternative data sources. We argue that a systematic approach is uniquely positioned to capitalize on these shifts. Read the full paper here: https://bit.ly/3EuucjL