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AQR: The case for portable alpha for long-only investors

In this short article, the team at AQR discuss the concept of ‘portable alpha’ as a strategy for enhancing investment returns, especially in the context of rising stock market valuations and the expectation of lower-than-average equity returns.

It highlights the limitations of traditional active management in long-only equity investments and suggests portable alpha as a viable alternative. Portable alpha involves utilizing the active management skills of hedge funds within a long-only investment framework.

Although the concept is not new, the article notes that its implementation has significantly improved over time, offering investors a straightforward method to incorporate diversified and higher-quality alpha into their investment portfolios.

In today’s marketplace, investors have access to bundled products (i.e., hedge fund alpha plus the beta of your choice) that are simple, single line items alongside typical long-only investments. We believe that today more investors (finally) have a viable way to get higher, and higher quality, excess returns into the equity sleeve of their portfolios.

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Disclaimer of liability

The above has been prepared by Børsgade ApS for information purposes and cannot be regarded as a solicitation or recommendation to buy or sell any security. Nor can the information etc. be regarded as recommendations or advice of a legal, accounting or tax nature. Børsgade cannot be held liable for losses caused by customers’/users’ actions – or lack thereof – based on the information in the above. We have made every effort to ensure that the information in the above is complete and accurate, but cannot guarantee this and accept no liability for errors or omissions.

Readers are advised that investing may involve a risk of loss that cannot be determined in advance, and that past performance and price development cannot be used as a reliable indicator of future performance and price development. For further information please contact info@borsgade.dk

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