Clifford S. Asness, managing and founding partner of AQR Capital Management, touched on a broad range of topics including value investing, the impact of the COVID-19 crisis on investment management and his love of sports during a free-ranging conversation with Frank J. Fabozzi, editor-in-chief of the Journal of Portfolio Management.
During a webcast on the JPM's website that aired Wednesday, in response to a question from Mr. Fabozzi, Mr. Asness reiterated AQR's conviction that systematic value investing isn't dead, based on the firm's extensive research which he presented in a May 8 blog post.
"Value has worked on average for 100 years," Mr. Asness said and will continue to work because it depends on human behavior, especially the tendency of people to "overreact" to market conditions regarding cheap and expensive stocks. AQR expects a large recovery for value stocks going forward, he said.
Mr. Fabozzi asked how the coronavirus pandemic has affected AQR's investment approaches.
Mr. Asness admitted that "value had a terrible month in March," but stressed that the crisis "doesn't really change anything we do," noting that the firm's macro strategies are neutral to markets and industries and the firm's portfolio managers aren't making huge bets. "Most of our investments are very, very small. COVID-19 will buffet the world and us, but it doesn't much change the fundamental processes we use."
