AQR

AQR Capital Management’s strategic reset merits an upgrade in its Parent rating to Above Average from Average.

Originally a hedge fund shop founded in 1998, the quantitatively driven firm launched its first mutual funds in 2009. By early 2018, the firm grew that part of its business worldwide to more than USD 55 billion and firmwide assets to more than USD 220 billion, including separate accounts and private pooled vehicles. Years of poor performance and persistent outflows followed, however, dropping AQR’s assets to roughly USD 95 billion at year-end 2022.

About a year prior to hitting that low, co-founders Clif Asness and John Liew reasserted day-to-day oversight and began to reshape the firm. They removed layers of middle management and trimmed the research teams, keeping them lean in quantity but robust in quality. AQR also streamlined the product lineup, exiting from long-only fixed income.

With renewed focus, AQR is now integrating adaptive machine-learning models across its product suite. The models augment existing signal utilization and strengthen portfolio construction and implementation without abandoning AQR’s economics-led, evidence-based philosophy. Process enhancements coincided with improved performance and a rebound in assets as of October 2025 to nearly USD 175 billion, more than USD 40 billion of which was in mutual funds.

AQR’s lineup could struggle again. Its strategies are built on a common signal library, so factor rotations like sharp value drawdowns and momentum crashes can still ripple across multiple strategies at once. Adaptive models may dampen these dependencies, but they do not eliminate them. The signals from these models can also be difficult to interpret. Even so, the post-2021 rebuild has left the firm better positioned to navigate future challenges.

Note: This share class' Parent Pillar rating is analyst-driven, as its Branding Name, AQR (Branding Name ID: BN00000BVN), is covered by Morningstar Manager Research.