AQR Capital Management’s Multistrategy Funds Shine in 2024 Amid Warnings of Overheated Markets

AQR Capital Management’s multistrategy offerings have delivered strong returns in 2024, with its flagship funds thriving in a volatile market environment. Despite concerns over elevated valuations, the firm’s diversified approach continues to pay off.

AQR’s Apex strategy, a $2.3 billion multistrategy fund, achieved a 15.1% return in 2024, benefiting from strong stock-picking and macro trading. This marks another year of double-digit gains for Apex, signaling robust performance even amid concerns about market conditions.

The $2.2 billion AQR Delphi Long-Short Equity Strategy also saw impressive returns, jumping 24.1% in 2024. The strategy, which focuses on high-quality, low-risk stocks, outperformed broader market expectations. Meanwhile, the AQR Equity Market Neutral Fund, a smaller offering, surged 25.3%, ranking in the top 4% of its category, according to Bloomberg data.

These results cap off another successful year for AQR, which has been enjoying a post-pandemic resurgence. The firm’s strong performance comes in a higher-rate environment, which has opened up more trading opportunities for hedge funds.

AQR’s performance rivals that of other top players in the hedge fund industry, including Ken Griffin’s Citadel and Izzy Englander’s Millennium Management. The firm, alongside others like D.E. Shaw, has been steadily gaining popularity within the hedge fund community, thanks to its shift towards a multistrategy model.

In addition to its equity-focused strategies, AQR’s $2.5 billion Helix strategy, which trades trends in alternative markets, posted a solid 17.9% return in 2024. This was a significant outperformance compared to the 2.56% return of Societe Generale’s trend-following funds. The success of Helix was driven by trends in stock factors and yield curves.

Despite the strong performance, AQR co-founder Cliff Asness remained outspoken about the risks of blindly investing in the U.S. stock market, particularly at a time of high valuations. In a tongue-in-cheek post on the firm’s website, Asness sarcastically speculated about the disappointment of future investors who ignored the dangers of paying excessive multiples for U.S. stocks. “It turned out that paying an epic multiple for the U.S.A. compared to the rest of the world mattered somewhat more than we thought,” Asness wrote, reflecting his long-standing caution about the sustainability of current market conditions.

As AQR continues to perform well, its leaders remain vigilant about the potential risks that come with chasing market highs, particularly in a climate of elevated stock valuations.

Related Articles