AQR Capital Management has launched its Core Plus Bond Fund, a systematic fixed income fund designed to provide investors with a differentiated approach to fixed income investing.
The Fund systematically implements fundamental drivers of returns such as value, momentum, carry and defensive themes. It seeks to consistently outperform its benchmark, the Bloomberg Barclays US Aggregate Index, and generate excess returns that are uncorrelated to fixed income markets, other fixed income managers as well as equity markets.
“We developed the Fund to offer investors an innovative way to invest in fixed income,” says David G Kabiller (pictured), AQR Co-Founder. “Unlike traditional approaches, which often pull the same levers to achieve their return targets, such as taking on more credit risk, our Fund’s consistent, risk-controlled approach offers investors true diversification.”
The Fund is invested in a portfolio of liquid instruments, balanced across the fixed income universe. The Fund aims to generate returns through security selection within sectors, curve positioning, and currency selection, with minimal active duration or credit “bets.” It strives to maintain a risk level consistent with its benchmark.
“Our approach is rooted in AQR’s research-based investment philosophy,” says Jordan Brooks, Portfolio Manager. “We have found that systematic strategies can be as successfully applied in fixed income as in equities, offering investors access to targeted sources of returns, many of which are altogether absent from traditional fixed income portfolios.”
The Fund’s management team has deep fixed income market expertise, and will leverage AQR’s robust research resources which are continually refined to enhance the strategy and investment process. While AQR has invested in fixed income for over 19 years in its multi-strategy products, this is the first time its expertise has been made available through a standalone fixed income mutual fund.