Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
I think the real problem is AQR and not AQRNX itself. If your funds do well, you close them, THEN decide to open fund to fill a niche or because "the market demands it", or whatever, that is one thing. However when several of your funds are doing bad, you are a self admitted hedge fund experts with ability to handle risk, shorting, hedging, managing drawdowns, then explicitly stating so as objective in your prospectus, then not delivering, AND finally keep starting more and more funds of the same kind AS WELL AS regular equity funds, then clearly you are not doing so in the best interest of your shareholders.
I expect AQR as a firm to have like 5-6 funds. It seems to be outdoing everyone else out there in starting funds. To me that's a cultural issue. And if I have to pick lesser evil, I will.
Reply to @Investor: I am very glad that I did not stick around with this fund. If it is going to this slow to adjust in risk relations I see there will be problem episodes with this fund.
Another fund that I looked and eventually decided not to invest is PAUIX. I am happy for that decision as well.
Reply to @ducrow: I too do not like that AQR is partly owned by Affiliated Managers Group and that they seem to be generating new funds quarterly, like VintageFreak points out. Especially irksome that they opened two new RP funds, with different risk flavors, as soon as they closed the (up until recently) well performing AQRIX. Will be interesting to see if low AUMs reverse that decision. Speaking of turnarounds, here's latest performance plot from AQR site, through July:
Reply to @Charles: CRAP! I must have been sleeping! The day I saw Royce opening funds like they were going out of style in the small cap space, I started researching and learned they were actually owned by Legg Mason. I got out of all my Royce Holdings including one I held in my then 401K the next day.
I thought Asness was the guiding light behind this company. Now I know it is AMG. I've only vaguely heard of AMG. What other fund complexes do they own? This is a complete game changer for me. I need to know if I should get out Monday. No tax implications since both my ARCNX and AQRNX holdings are in my IRA.
Please do reply regarding AMG. All I see is this on website
Majority owned by AQR principals; minority stake held by Affiliated Managers Group
49% can be minority stake. If that's true, I'm out.
Reply to @VintageFreak: Yacktman Funds are under AMG. AMG is kind of an umbrella company. They acquire a number of boutique shops with a few funds each and leave the management in place and provide them the freedom of managing the funds like before.
An example of this type of organization was with Yacktman funds. It has been OK so far with that shop. I think the real problem is not AMG but AQR itself. Their model for Risk Parity did not work in the latest swoon when both equity and bonds hit at the same time.
Reply to @Investor: Good to know. I'll stick to my guns with AQR for now even though I did not fully understand AQRNX. Regarding ARCNX I want to wait for June 2013 report to see how/if they explain WTF happened to their "drawdown control". I would NEVER invest in a commodity fund until they led me to believe this was a conservative play. I don't even do ANY sector funds.
Now I can evaluate my AQR holdings on merit alone. Still would like to know how much AMG owns. Not interfering with management is fine, but if their stake is significant, then either they or AQR itself is getting greedy for assets.
These guys are trying my patience. Both ARCNX and AQRNX boast drawdown control even in their sound bites. They better have a good explanation. I can take the hint I was not smart enough to figure out they were leveraging bonds in these funds. However, I want to see the excuse for no freak*** drawdown control.
Reply to @3yards: We actually thought they would do pretty much what they have done. Our due diligence indicated there was potential risk in an interest-rate event like what happened in May. Too much dependency on fixed-income and not enough downside protection. For once, we were correct to a major degree.
Reply to @BobC: Nice. Thanks for sharing Bob, lesson-learned. I think I expected them to be more agile. Maybe too many of their holdings were in decline...EM, commodities, bonds...all falling at once. August 8th...and still no commentary from AQR on 2Q performance.
I've avoided these ideas since they don't fit into a retired 79 year olds portfolio. Anything that sounds too different is often a waste except for the sponsor.
Reply to @ron: When I'm 79, and living, I hope to keep whatever I have in cash and expect 2% interest instead of 0%. I don't think I will have courage, energy, etc. to invest.
OKay M* changing colors like Chameleon so don't worry so much. AQR not advertising on M* looks like. When that changes, all bad stuff regarding AQR will dissappear.
By the way looks like that link only for premium members.
Comments
I expect AQR as a firm to have like 5-6 funds. It seems to be outdoing everyone else out there in starting funds. To me that's a cultural issue. And if I have to pick lesser evil, I will.
Another fund that I looked and eventually decided not to invest is PAUIX. I am happy for that decision as well.
Not great, but better! Still no 2Q commentary.
I thought Asness was the guiding light behind this company. Now I know it is AMG. I've only vaguely heard of AMG. What other fund complexes do they own? This is a complete game changer for me. I need to know if I should get out Monday. No tax implications since both my ARCNX and AQRNX holdings are in my IRA.
Please do reply regarding AMG. All I see is this on website
Majority owned by AQR principals; minority stake held by Affiliated Managers Group
49% can be minority stake. If that's true, I'm out.
An example of this type of organization was with Yacktman funds. It has been OK so far with that shop. I think the real problem is not AMG but AQR itself. Their model for Risk Parity did not work in the latest swoon when both equity and bonds hit at the same time.
Now I can evaluate my AQR holdings on merit alone. Still would like to know how much AMG owns. Not interfering with management is fine, but if their stake is significant, then either they or AQR itself is getting greedy for assets.
https://www.aqrfunds.com/Portals/0/FundDocuments/Basic Information/Fact Sheet/RPMF.I.pdf
Fund Favorites & Red Flags: BlackRock, PIMCO, and More
By the way looks like that link only for premium members.