Diversifying with Alternative Investments

Alternatives can help diversify and complement traditional portfolios by seeking returns that are independent from equity and bond markets and reducing overall sensitivity to traditional markets. 

It is difficult to predict when investments will perform well or poorly over the next decade or even the next year. As shown in the chart below, Stocks, Bonds, and Alternatives have each experienced performance highs and lows over time. However, the Diversified Portfolio, which incorporates and spreads risk across all three asset classes, has experienced more consistent long-term performance. As a diversifying asset class, alternatives can be viewed as a valuable component of a long-term investment plan.

Why Invest in Alternatives?

In this video introduction, we outline the benefits of investing in alternatives and explain how they may enhance a traditional portfolio.

Risk Disclosures:
Alternative investing strategies such as Equity Market Neutral and Managed Futures involve the use of derivatives, forward and futures contracts, and commodities, which can lead to additional risks including increased volatility, lack of liquidity, and possible losses greater than the initial investment as well as increased transaction costs. All investors considering these strategies should be able to tolerate wide price fluctuations.  Arbitrage strategies have the risk that the anticipated opportunities do not play out as planned, resulting in potentially reduced returns or losses. Before trading, investors should carefully consider their financial position and risk tolerance to determine if the proposed trading style is appropriate. All investing is subject to risk including the loss of principal. All funds committed to such a trading strategy should be purely risk capital. Past performance is no guarantee of future results. Diversification does not eliminate risk

Benefits to Investors

Portfolio Diversification
When added to a traditional portfolio allocation, alternatives may provide additional diversification benefits such as reduced portfolio volatility or improved risk-adjusted returns.
Opportunity for Additional Sources of Return
Alternatives can provide investors with an additional opportunity for positive returns that are not accessible through traditional investments.
Potential to Mitigate Losses
Alternatives tend to perform well in various market environments due to their reduced sensitivity to traditional stock and bond market movements.

There can be no assurance that any investment strategy will be successful.


A summary of investor rights is available above in the Documents section of the website and is available in English.

Investment in any of the funds described on this website carries substantial risk, including the possible loss of principal. There is no guarantee that the investment objectives of the funds will be achieved and returns may vary significantly over time. Investment in the funds described on this website is not suitable for all investors. Not all funds or share classes are available to all investors.

This is a marketing communication. Please refer to the Prospectus and KIID for more information on general terms, risks and fees. Investors should only invest in the Fund once they have reviewed the Prospectus and KIID, the most  recent versions are available free of charge, in English and in your local language at AQR UCITS Funds, c/o HedgeServ  (Luxembourg) S.à r.l1st Floor, Infinity Building, 5 Avenue John F. Kennedy, L-1855, Grand Duchy of Luxembourg, along with the annual and semi-annual report and articles (each in English). Investors may wish to consult an independent financial advisor for personal and specific investment advice before investing. Only the information provided in the Prospectus and the KIID is legally binding. Not all share classes are available for investment in all countries. The Prospectus as well as a summary of investor rights are available in English. The relevant KIID is available in Danish, Dutch, English, French, German, Icelandic, Italian, Norwegian, Spanish, Swedish, and depending upon the specific fund, Greek and Portuguese. These documents are available at: https://ucits.aqr.com/. For further information regarding the risks of investing in the Fund please refer to the Risk and Reward section of the KIID and the section of the Prospectus entitled “Risk Factors.”

Umbrella Fund:
The Fund is a sub-fund of AQR UCITS Funds, a Luxembourg based UCITS of which the management company is FundRock Management Company S.A.

The information contained on this website is for informational purposes only and does not constitute an offer or invitation to buy, sell or otherwise transact in any security. The information on this site is directed only at persons or entities in any jurisdiction or country where such access to information contained on this website and use of such information is not contrary to local law or regulation. Accordingly, all persons who access this website are required to inform themselves of and to comply with any such restrictions. The prospectus, KIID and the latest periodic reports for each fund are available free of charge.

Please note that the management company may decide to terminate the arrangements made for the marketing of the Fund in any country where it has been registered for marketing.

Past performance does not predict future returns.

Broad-based securities indices are unmanaged and are not subject to fees and expenses typically associated with managed accounts or investment funds. Investments cannot be made directly in an index.

The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.

The MSCI China A Net Total Return USD Index captures large and mid-cap representation across China securities listed on the Shanghai and Shenzhen exchanges. The index covers only those securities that are accessible through "Stock Connect". The index is designed for international investors and is calculated using China A Stock Connect listings based on the offshore RMB exchange rate (CNH).

The ICE BofAML 3-Month U.S. Treasury Bill Index tracks the performance of the U.S. dollar denominated U.S. Treasury Bills publicly issued in the U.S. domestic market with a remaining term to final maturity of less than 3 months.

The MSCI World 100% Hedged to USD NETR Index represents a close estimation of the performance that can be achieved by hedging the currency exposures of its parent index, the MSCI World Index, to the USD, the “home” currency for the hedged index. The index is 100% hedged to the USD by selling each foreign currency forward at the one-month Forward weight. The parent index is composed of large and mid cap stocks across 23 Developed Markets (DM) countries and its local performance is calculated in 13 different currencies, including the Euro.

The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets.

Euro Short-Term Rate (€STR) is an interest rate benchmark that reflects the overnight borrowing costs of banks within the eurozone.

Sterling Overnight Index Average (SONIA) is the effective overnight interest rate paid by banks for unsecured transactions in the British sterling market.

Swiss Average Rate Overnight index (SARON) represents the overnight interest rate of the secured money market for Swiss francs.

MAS is the Monetary Authority of Singapore Benchmark Govt Bill Yield 3 Month Index.

HKMA is the Hong Kong Monetary Authority Hong Kong Exchange Fund Bills Fixings 3 Month Yield Index. 

This is a marketing communication in the European Economic Area (“EEA”) and approved as a Financial Promotion in the United Kingdom (“UK”). It is only intended for Professional Clients.

The fees and charges paid by the Fund will reduce the return on your investment. Certain costs paid by the Fund will be charged in USD and exchange rate fluctuations may cause these costs to increase or decrease when converted into your local currency.

The Investment Manager is entitled to receive a performance fee in relation to certain share classes of the Fund. Please refer to the prospectus to check if a performance fee is charged on your shares and for further detail of the performance fee calculation method. Where charged, the performance fee is calculated in respect of each twelve-month period ending on 31 March of each year (“Calculation Period”). The performance fee calculation methodology applies a high-on-high model, whereby the performance fee may only be charged if the net asset value per share exceeds the net asset value per share at which the performance fee was last crystallised. The performance fee may only be charged if the cumulative overperformance/(underperformance) since the date at which the performance fee was last crystallised is a positive amount. In other words, the methodology incorporates a “loss carryforward” mechanism, meaning that losses carried forward from a previous Calculation Period will have to be recovered before any performance fee becomes payable. The performance fee amounts to 10% of any increase in value of the share class above the relevant hurdle. Negative performance of the hurdle will not be taken into account in calculating the performance fee. The performance fee is crystallised annually on 31 March, or the date when shares are redeemed. The performance reference period (i.e. the time horizon over which the performance is measured and the loss carryforward mechanism applies) corresponds to the whole life of the share class and cannot be reset. Generally, the performance fee is paid to the Investment Manager within 14 business days of the month end in which crystallisation occurs.

Information for clients in the United Kingdom
The information set forth herein has been prepared and issued by AQR Capital Management (Europe) LLP, a UK limited liability partnership with its office at Charles House 5-11, Regent St., London, SW1Y 4LR, which is authorised and regulated by the UK Financial Conduct Authority (“FCA”).

Information for clients in the EEA
AQR in the European Economic Area is AQR Capital Management (Germany) GmbH, a German limited liability company (Gesellschaft mit beschränkter Haftung; “GmbH”), with registered offices at Maximilianstrasse 13, 80539 Munich, authorized and regulated by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, „BaFin“), with offices at Marie-Curie-Str. 24-28, 60439, Frankfurt am Main und Graurheindorfer Str. 108, 53117 Bonn, to provide the services of investment advice (Anlageberatung) and investment broking (Anlagevermittlung) pursuant to the German Securities Institutions Act (Wertpapierinstitutsgesetz; “WpIG”). The Complaint Handling Procedure for clients and prospective clients of AQR in the European Economic Area can be found here: https://ucits.aqr.com/Legal-and-Regulatory.