AQR Diversified Arbitrage Fund Class R6 (QDARX)

Overview

The fund is designed with the primary objective of outperforming the ICE BofA US 3-Month Treasury Bill Index after accounting for expenses. It prioritizes maintaining a manageable level of tracking risk concerning this benchmark. To achieve its goals, the fund employs a diversified investment strategy. This approach encompasses a wide array of financial instruments to maximize returns while adhering to its risk management protocols.

Products and Services

• Equities - The fund invests in a broad selection of stocks from various sectors, aiming to capture growth and income. This includes investments in both domestic and international markets.
• Convertible Securities - These are corporate bonds or preferred stocks that can be converted into a predetermined amount of the company's equity at certain times during its life, usually at the discretion of the bondholder. This allows the fund to participate in the equity upside while providing downside protection through fixed income.
• Debt Securities - The inclusion of bonds and other forms of debt instruments helps in generating regular income for the fund. This varies from government bonds to high-yield corporate debt, balancing risk and return.
• Loans - Investing in loans, including those syndicated or directly originated by the fund, can offer higher yields than traditional fixed-income securities, albeit with higher risk.
• Rights, Warrants, Options - The fund may engage in more speculative investments, such as rights, warrants, and options. These derivatives have the potential for high returns but also possess a high risk, depending on their nature and the direction of the underlying assets.
• Swaps, Futures Contracts, Forwards - Through engaging in swaps, futures, and forwards, the fund can hedge against certain risks or speculate on the direction of markets, commodities, currencies, or interest rates. These instruments can significantly influence the fund's performance, subject to wide fluctuations.
• Other Types of Derivative Instruments - The fund may also use varied derivatives beyond those mentioned to achieve its strategic objectives. These instruments can be complex and involve leverage, contributing to both the opportunity for higher gains and the risk of significant losses.