From earning his PhD under the great economist Gene Fama to launching AQR, one of the country’s first quantitative funds, Cliff Asness offers a unique perspective on financial markets. Winner of several awards, including five Bernstein Fabozzi/Jacobs Levy Awards from The Journal of Portfolio Management, two-time winner of the Graham and Dodd Excellence Award for the year’s best paper, and second prize in the Fama/DFA Prize for Capital Markets and Asset Pricing, among others, Cliff has been well-recognized for his outstanding contributions to his field.
This week on the FEG Insight Bridge, Greg picks Cliff’s brain on a range of topics, including where investors can expect to see returns in the next 10 years, what happens when stock-bond diversification fails, his thoughts on private equity modeling, what Cliff really thinks of market efficiency, and the potential role of AI in investing going forward. Listen in as Cliff’s witty retorts and insightful answers have Greg nodding in agreement.
Chapters
00:00:00 Intro
00:00:31 Episode Overview
00:01:10 A brief introduction of Cliff and AQR
00:01:49 Where will investors see returns in the near future?
00:06:35 The role of bonds in a portfolio
00:11:22 What happens when stock-bond diversification breaks down?
00:14:13 How does stagflation impact the 60/40 portfolio?
00:15:19 Cliff’s views on market efficiency
00:20:22 Cliff’s take on value investing
00:28:28 Modeling private equity in a volatile environment
00:36:49 Fair fees and Asness’ Law
00:40:48 Comparing the quant industry now to when it started
00:47:15 The impact of AI on quant investing