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ASMOX

AQR SmallCap Momentum Style-I

Category:

Small Cap Growth

Benchmark:

S&P 500 Total Return Index (SP-DA)

AUM:

150.012

TTM Yield:

0.61%

Expense Ratio:

0.62

Momentum-Driven Small Cap Excellence

The AQR SmallCap Momentum Style-I Fund (ASMOX) stands out in the small cap growth category by focusing on long-term capital appreciation through a momentum-driven strategy. This fund primarily invests in small cap companies listed on major U.S. exchanges, targeting those with positive momentum. This strategic focus allows the fund to capitalize on the growth potential of smaller companies that are often overlooked by larger funds. The fund’s management team employs a rigorous selection process to identify equities that exhibit strong momentum, ensuring that the portfolio is well-positioned to benefit from upward market trends. This distinctive approach not only sets the fund apart from its peers but also aligns with investors seeking dynamic growth opportunities in the small cap sector.

At A Glance

Executive Summary

AQR SmallCap Momentum Style-I (ASMOX) targets long-term growth via small cap equities with positive momentum, boasting a 10-year return of 10.24% and a competitive expense ratio of 0.62%.

– Strong 1-year return of 54.17%. – Focus on small cap equities with positive momentum. – Competitive expense ratio of 0.62%. – High alpha of 15.33%, indicating strong performance relative to the benchmark.

– High beta of 1.61, indicating higher volatility. – Max drawdown of -12.1% suggests potential for significant losses. – Lower yield of 0.61% may not appeal to income-focused investors.

Impressive Returns Amidst Market Fluctuations

The AQR SmallCap Momentum Style-I Fund has demonstrated impressive performance across various time frames, particularly with a remarkable 1-year return of 54.17%. This performance significantly outpaces its benchmark, the S&P 500 Total Return Index, which posted a 1-year return of 38.80%. The fund’s 10-year annualized return of 10.24% further underscores its ability to deliver consistent growth over the long term. Notably, the fund’s standout performance during the past year can be attributed to its strategic focus on small cap equities with positive momentum, which have thrived in the current market environment. This ability to outperform during periods of market volatility highlights the fund’s adept management and strategic foresight.

Navigating Volatility with a High Beta

The AQR SmallCap Momentum Style-I Fund exhibits a high beta of 1.61, indicating a higher level of volatility compared to the broader market. This suggests that the fund is more sensitive to market movements, which can be both an advantage and a risk depending on market conditions. The fund’s Sharpe ratio of 0.68 reflects a balanced risk-reward profile, while its alpha of 15.33% indicates strong performance relative to its benchmark. The fund’s risk management strategy involves a careful selection of small cap equities with positive momentum, which helps mitigate downside risk while capitalizing on upward trends. Investors should be aware of the fund’s potential for significant fluctuations and consider their own risk tolerance when evaluating this investment.

Strategic Sector and Portfolio Allocation

The AQR SmallCap Momentum Style-I Fund’s portfolio is strategically diversified across various sectors, with significant allocations in health care (24.38%), industrials (18.30%), and financials (16.45%). This sector allocation reflects the fund’s focus on industries with strong growth potential and positive momentum. The fund’s top holdings include companies like Sprouts Farmers Market Inc and Summit Therapeutics Inc, which are indicative of its emphasis on small cap equities with robust performance metrics. The fund’s allocation strategy is designed to capture opportunities in sectors that are poised for growth, while its dynamic approach to portfolio adjustments ensures that it remains responsive to changing market conditions. This strategic focus on sector and portfolio composition is a key driver of the fund’s performance.

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Yield and Income Strategy for Growth Investors

With a yield of 0.61%, the AQR SmallCap Momentum Style-I Fund may not be the first choice for income-focused investors. However, its income strategy is aligned with growth-oriented objectives, making it suitable for investors seeking capital appreciation rather than immediate income. The fund’s focus on small cap equities with positive momentum supports its growth strategy, as these companies often reinvest earnings to fuel expansion rather than distribute dividends. This approach is ideal for investors who prioritize long-term growth over short-term income, as the fund’s potential for capital appreciation can lead to substantial returns over time.

Cost-Effective Growth with Competitive Expenses

The AQR SmallCap Momentum Style-I Fund boasts a competitive expense ratio of 0.62%, which is relatively low for a fund in the small cap growth category. This cost-effectiveness enhances the fund’s net returns, allowing investors to benefit more from its strong performance. Compared to similar funds, ASMOX offers a favorable balance between expenses and potential returns, making it an attractive option for cost-conscious investors. The fund’s efficient management of expenses ensures that more of the fund’s gains are passed on to investors, reinforcing its appeal as a growth-focused investment vehicle.

Standing Out in a Competitive Landscape

In the competitive landscape of small cap growth funds, the AQR SmallCap Momentum Style-I Fund distinguishes itself through its unique momentum-driven strategy and strong performance metrics. Compared to similar funds like Lord Abbett Developing Growth-I and Invesco Discovery-Y, ASMOX offers a compelling combination of high returns and competitive expenses. While its peers may offer slightly higher 1-year returns, ASMOX’s focus on positive momentum and its strategic sector allocation provide a distinct advantage. This fund’s ability to navigate market volatility and deliver consistent growth makes it a standout choice for investors seeking exposure to small cap equities with strong momentum.

Future Outlook

The AQR SmallCap Momentum Style-I Fund is poised for potential growth, especially in bullish market conditions favoring small cap stocks. Its momentum strategy could capitalize on upward trends, making it advantageous during economic expansions.

Ideal for Growth-Oriented, Risk-Tolerant Investors

The AQR SmallCap Momentum Style-I Fund is well-suited for investors who are growth-oriented and have a higher risk tolerance. Its focus on small cap equities with positive momentum offers significant growth potential, making it an attractive option for those seeking long-term capital appreciation. The fund’s higher beta and potential for volatility may not appeal to conservative investors, but for those willing to embrace risk, ASMOX provides an opportunity to capitalize on dynamic market trends. Ideal investors for this fund are those who prioritize growth over income and are comfortable with the inherent risks associated with small cap investments.

Current Market Context and Strategic Positioning

In the current market environment, characterized by fluctuating interest rates and sector-specific growth opportunities, the AQR SmallCap Momentum Style-I Fund is strategically positioned to capitalize on these dynamics. The fund’s focus on small cap equities with positive momentum aligns well with sectors experiencing robust growth, such as health care and technology. As interest rates impact borrowing costs and investment flows, the fund’s emphasis on momentum-driven stocks allows it to adapt to changing economic conditions. Additionally, the fund’s tax implications are favorable for long-term investors, as its growth-oriented strategy minimizes taxable distributions. This strategic positioning makes ASMOX a compelling choice for investors looking to navigate the complexities of the current market landscape.

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