Having embraced evidence-based investing as one way we help our clients enjoy simplicity and transparency in their financial lives, we are careful to the point of obsession when  considering fund manager alliances. We want to collaborate with firms who share our “client-first” business strategy, and are as thoughtful as we are about investing.

That’s why I recently attended a two-day AQR Capital Management Investment Symposium in San Francisco. I wanted to hear more about the traditional and alternative strategies AQR is working on to help investors capture market returns, manage market risks and minimize the costs involved. Insightful commentary about the way they think (like this piece here) is just one of the reasons the firm has experienced explosive growth over the last eight years.

Here are some of the event’s key takeaways that appealed to me:

• The firm takes a systematic approach to its investment strategies, to avoid the emotional bias that creeps in when “human interaction” is involved.
• They’re big on peer-reviewed research – others and their own.
• They look at lots of new strategies or how to improve on existing ones, but they only bring a handful of what they consider to be their best ideas to market.
• While many of AQR’s strategies are hedged, they are a rare breed as low-fee champions, decrying the traditional (excessive) “2 and 20” hedge fund fee structure. “We won’t do anything that will not provide – or leave – the investor with a reasonable return,” said managing and founding principal Cliff Asness. (That sounds smart to me.)
• They’re also big on diversification as an important way to improve on investor outcomes. “We look at everything,” said Asness. “If it’s uncorrelated, it’s additive.”
• Like us, they emphasize financial literacy and investor education as key. As AQR’s managing director Pete Hecht said, “We all should hold our managers accountable for what they claim to offer. … It’s our job to be helpful and to educate.”

Well said, and I’m glad I invested the two days. While AQR’s solutions may not fit well with every investor’s portfolio, personal circumstances and long-range plans, it was refreshing to hear what they had to say.

Alert – This link is only for those of you who like the backstage, technical stuff.

Cliff Asness recently wrote a piece for Bloomberg called Indexing Is Capitalism at Its Best and we tend to agree. This column is in response to an active manager’s “research” report warning of the dangers of too much money moving to index, passive, and evidence-based strategies. Please make sure to read the footnotes, as they are every bit as relevant as the main content.

The Financial Times recently profiled master communicator, chief investment officer, and co-founder of AQR, Cliff Asness. His quotes often get our attention and this short clip is no different. “You get paid and you create value by doing something that is good and sticking with it like grim death.”  Click here to read the article.