Feb
15 -
15 -
21 -
21 -
28 -
|
About the Author
Adam Berger
Vice President and Head of Portfolio Solutions, AQR Capital Management, LLC
Adam Berger is vice president and head of portfolio solutions. He joined AQR in 2007 after 11 years with Goldman Sachs where he most recently served as a senior research strategist in asset management, working with their largest institutional investors on strategic investment policy issues. Prior to this, Berger worked in the equities division of Goldman Sachs and in the firm's pension services group. He holds an AB in Philosophy, magna cum laude, from Harvard College and an MBA from the Wharton School of Business at the University of Pennsylvania where he graduated with Honors and was named a Palmer Scholar.
Articles Published
Showing results 1 to 1 of 1
Is Alpha Just Beta Waiting to be Discovered?
Alpha is shrinking, and it’s good news for investors. This idea may seem paradoxical. But alpha is really just the portion of a portfolio’s returns that cannot be explained by exposure to common ... Read moreAlpha is shrinking, and it’s good news for investors. This idea may seem paradoxical. But alpha is really just the portion of a portfolio’s returns that cannot be explained by exposure to common risk factors (betas). With the emergence of new betas, the unexplained portion (alpha) shrinks – alpha gets reclassified as beta. The rise of a group of risk factors we call hedge fund betas makes this transformation especially relevant today. Hedge fund betas are the common risk exposures shared by hedge fund managers pursuing similar strategies. We believe these risk factors can capture not just the fundamental insights of hedge funds, but also a meaningful portion of their returns.
Hedge fund betas are available for investment and can also be used to enhance portfolio construction and risk management. Ultimately, we believe the rise of hedge fund betas will lead not only to the reclassification of alpha, but also to better-diversified portfolios with greater transparency, improved risk control, and – perhaps most importantly – higher net returns.
|
|
