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This Fund Takes a Scientific Approach to Stock Selection

Bronze-rated AQR Large Cap Multi-Style employs a handful of rules-driven approaches seeking to boost return and manage risk.


Alex Bryan: AQR Large Cap Multi-Style (QCELX) is a compelling U.S. large-cap strategy. It follows a rules-driven approach that targets stocks with low valuations, strong recent price performance (or momentum), and strong profitability. Each of these characteristics has been associated with higher long-term stock returns in nearly every market studied over the long term, but they don't always work. Putting these investment styles together reduces the risk of extended periods of underperformance because each style tends to work best at different times.

This fund pursues those style tilts more aggressively than many of its peers, which should give it an edge if these themes continue to pay off. At the end of each month, the fund assigns composite style scores to the largest 1,000 U.S. stocks based on select value, momentum, and profitability metrics. It targets the top-scoring 25% and weights these holdings according to both their market capitalization and the strength of their style characteristics.

Alex Bryan does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.