Cliff Asness’s AQR Slams Buffer-ETF Boom on ‘Investment Failure’

AQR Capital Management has come out swinging against the rise of options-powered funds that limit losses during stock downturns, claiming this growing form of portfolio insurance delivers lower returns — with more risk — than simpler alternatives.

New research from the Greenwich, Connecticut-based quant manager argues that so-called buffer or defined-outcome strategies, which now command an estimated $50 billion in exchange-traded fund assets, are no free lunch.