Hi Bill,
So many areas/sectors were connected with large losses during the 08-09, it is difficult to assess going forward if anything would be different from a similar event. Many index funds would not do well, I suspect. And yes, recovery could be difficult; if the holdings were sold at a wrong time. Sadly, I am sure too many folks in retirement or just moving into retirement were hurt by the market melt; almost 5 years ago.
Take care of you and yours,
Catch

Reply to @catch22:
I don;t have a spouse. At retirement my retirement account had a cash value. My pension payouts are based on a 25% contribution from my retirement account (its cash value) and 75% from my ex-employer. So say I receive $1,000...$250 comes from my cash value. Each pension payment nick my cash value by 25% of the total pension payment. If I pass before I liquidate my account's cash value my beneficiaries receive the remaining balance. My benficiary does not have to be a spouse.

Reply to @AKAFlack:
Hi AKAFlack,
It’s good that you still participate on this forum. Your views are always respected.
You are spot on-target that accumulated portfolio value is pathway dependent. We would all hate to experience a significant down year immediately after our retirement date. Depending on the magnitude of the downturn, immediate action might be necessary. More on this later.
However, your Monte Carlo calculations are deeply flawed. It is not that the simulations themselves are wrong; it is that you corrupted the analyses by conflating a single probability analysis event into a double probabilistic sequence of events.
Your starting conditions were distorted by the combination of events that you postulated. In essence, you unwittingly created a Conditional Probability problem and contrasted it against a single Monte Carlo series.
A simple analogy that illustrates this error is that you initially generated the likelihood of the birth of a girl and then contrasted it with the probability of a blond girl being born. Adding constraints always reduces the combined probability.
If you propose to estimate the likelihood of Event A and Event B both happening, the probabilities of each must be multiplied together to get an overall probability. You failed to do so.
To again illustrate, let’s examine your T. Rowe Price Monte Carlo-based analysis in a little more detail.
By assuming a first year 30 % loss in the retirement portfolio, you dramatically changed the initial conditions of the problem Instead of retiring with a portfolio nest egg at the $750,000 level, the actual probabilistic assessment started a year later at the 0.7 X 750000. = $ 525,000 level. That’s not a fair comparison of equals.
By assuming a 30 % downdraft, you postulated a very unlikely event A. How unlikely?
Scanning the S&P 500 data from 1928 onward, only 3 equity annual return losses exceeded that horrendous performance. Using the historical data to establish a Black Swan Base Rate, that magnitude drop has about a 3.6 % likelihood of happening. Therefore, your scenario of a first year loss of 30 % followed by a conventional Monte Carlo simulation has a combined likelihood of under 3.6 %. The final result is dominated by the high, rare loss that you postulated as a given.
Personally, I will not develop white knuckles worrying over such an improbable investment series. By definition, Black Swans are unpredictable. I recall that you teach finance/investing at the Junior College level. I do worry about this type of faulty analysis finding its way onto the curriculum; it is a common mistake. Please do not make it in the classroom.
Now, there are simple but not always easy steps to protect against unhealthy equity surprises. A diversified portfolio mix of equities and bonds dampens the impact of a large equity downfall.
Proper asset allocation can reduce portfolio volatility (standard deviation) by about a factor of two without compromising expected annual returns. The lower portfolio standard deviation reduces the frequency of negative annual returns while mitigating the overall impact of a negative equity period. A 30 % equity loss might only mean a 12 % portfolio value reduction with bonds serving to cushion the whirlwind.
Finally, a retiree must always be flexible to adjust his withdrawal schedule. If returns fall short of expectations, simply pass on the inflation increase usually included in any competent retirement withdrawal plan.
If the downturn persists, the retiree has the option to again pass on the inflation adjustment and, if needed, modestly reduce the basic withdrawal rate. Sometimes hard times demand hard measures and a little sacrifice. Old soldiers understand the need for sacrifice.
I have done numerous Monte Carlo simulations that conclusively demonstrate that these modest drawdown devices greatly enhance the survival prospects of a portfolio during retirement.
I recognize that you know most of what I said. In haste, sometimes there is a disconnect between the brain and the keyboard. I am well aware of that disconnect.
Best Wishes.

davidrmoran,
It's like asking what they do if the asteroid strikes near Michigan. What's the point
of the question?
Here's your asteroid.
You say “…there is nothing to be done (except buy) other than to hang on.”
Do you understand the Sequence of Return Risk as it relates to
the shortened time period of retirement?
Example One -
You retire and the first year of that retirement the market rises 27%.
The next year it rises 7%. The next year it drops 13%.
The average annualized return is 7%.
The Age of Ruin (age at which you run out of money) is 94.9.
Example Two –
The first year of retirement the market drops 12%.
The next year it rises 8% and the next year it rises 28%.
The average annualized return is 8% - higher than Example One.
But the Age of Ruin is 83.5. That’s a difference of more than eleven years.
What caused this significant difference?
Another example – this one from T. Rowe Price Money calculator.
Retire at 65 with a $750,000 nest egg.
Withdraw $4,400 a month and receive $26,499 in SS.
Chances of money lasting 30 years is 90%.
Same scenario except that the market experiences a 30% drop during
the first year of retirement.
The result is that there is now only a 50% chance of the money lasting 30 years.
It’s the Sequence of Return Risk that makes the “hang on” strategy
a potential failure.

Reply to @catch22: I have multiple engineer friends from the Big 10. Some of my closest friends went to Wisconsin, Michigan, Michigan State, Penn State. My son and his family now live in Columbus, so I've seen the total obsession with the Buckeyes. I've seen plenty of "friendly" rivalries over the years.
Good luck in retirement.

Hi MikeM,
I agree. But still looking for some observations/comments for such a portfolio; and I don't know a better starting place, than here at MFO. Yes, the whole mix of retirement planning is more than an investment portfolio. This is not an attempt at a full estate plan or related.
As to Ohio, and for our house; the leaning has always been towards Michigan State. Both Michigan teams and Ohio always have "fun" in sports. As a side note and to the lite side of life; back in the day of paper maps being produced by a State (still done today for the tourist trade), found the following on a 1973 Michigan map issued by the state: Most state maps have portions of nearby states shown; and the 1973 map had two small towns listed on the map, east and south of Toledo, OH. One was "MgoBlu" and the other was something like "OhioBluit". Someone at a state office had some fun.
Thank you for your thoughts.
Take care,
Catch

All the added questions show how complicated this would be. I would go to a fee only financial advisor, lay out all this information and work on a total retirement plan. All you will get here is an assortment of favorite-fund portfolios that most likely won't fit you and your needs.
I personally enjoy the mutual fund portfolio game, but I know that the portfolio has to match everything else mentioned above. A fiduciary working personally for you is always a good investment, even if the meeting is a one time process. In fact, take a visit to the buckeye state and give BobC a call. Or is that blasphemy for a true "Blue" Michigan guy :)

Hi BobC,
You noted:
So are these people going to need any dollars from their investments?
>>> Not at this point in time. Their "net, after tax" pensions will cover their living needs with monies remaining.
Their pension income will cover the cash flow needs for now, but for how long? Regularly, once in a while? What is the percentage of withdrawal needed on a regular basis in the future? That number has a huge impact on allocation strategies.
>>> Their pensions, as is common, do not have a C.O.L.A. adjustments based upon CPI or similar. They are aware of purchase power loss from inflation from this circumstance.
Six to seven years forward will find both of them to begin the required minimum distributions from their "traditional" IRA monies, which will be 90% of their tax sheltered monies. The remaining 10%, more or less; is in Roth IRA's. Caluclations indicate that the RMD rates on IRA's are about 3.6% of the IRA values for the first year and increases slightly in percentage terms, going forward. Five years forward will also allow them to maximize their social security withdrawal amounts at age 70, versus any withdrawals prior to this age.
What is the maximum drawdown target?
>>> Their drawdown maximum would be near 5%; but the RMD (in 6 years) from the IRA's would include about 3.6% of this amount.
Do these people have long-term care insurance in place?
>>> This has been discussed, too. LTC insurance is not in place at this time; and the facts of the skyrocketing costs, insurers leaving the market place and existing contracts being adjusted for some folks will be investigated further. Although not LTC insurance, they will purchase supplemental insurance with their Medicare coverage; as well as drug prescription insurance. Their health background is very good; as well as that of their parents and family.
Are there any after-tax investment accounts, or is everything pre-tax?
>>> All monies to be invested is either traditional or Roth IRA's.
A brief summary would conclude that this couple have always been prudent with their monies, controlled their household budget/expenses and maintained a watch upon their invested monies. They have a good grasp of knowledge and overview of various investment styles and/or sectors to the point of understanding the variances. They understand the differences among the various equity or bond types/styles, be they domestic or international. They are not novice investors; and would be capable of asking very good questions, if having a discussion with an investment advisor. Other family members have stable employment and not likely to "move back home" to be supported and/or need financial help. Some monies from this couple will be placed towards 529 accounts for college.
Their good money habits over many years has allowed them to be at a most positive monetary point at this time in their lives. Although their pension monies will have much less purchasing power in 20 years, they will have income flow from SS (likely, with some form of CPI adjustments) and the RMD monies from the IRA's.
This couple has arrangements in place related to their estate settlement, upon their deaths.
They will enjoy their retirement time with some travel and not be sitting on their butts, at home, in the recliner chair.
Thank you, Bob. Hopefully, the above information provides a better overall view for consideration of their investments going forward.
Take care,
Catch

Do they plan on leaving any money for( kids) or have a really good time in retirement?

Reply to @catch22:
Thanks Catch,
As investors we also need to gauge and remind ourselves what we are trying to accomplish. What is our goal with all this?
Someone here at MFO shared Ben Graham's quote on successful investing:
"safety of principal and satisfactory return."
As investors we all should be acutely aware of "safety of principal". This is what we have sweated over and saved. The "satisfactory return" piece is relative to our age, our time horizon, our risk tolerance, or our place along the economic continuum, as well as many other factors.
If an individual can achieve a "satisfactory 7% yearly return" they can double their principal in ten years. This, to me, now becomes the new principal. In another 10 years the new principal doubles again. In a 40 year accumulation time horizon this doubling happens 4 times and turns "X" principal into 16"X" principal. The power of compounding.
So, say a 25 year old could muster up $10,000 it would compound over 35 years and equate to $160,000 at age 60. Additionally, this worker might saved another $10,000 over the next 5 years and so on. Each subsequent principal investment would go through fewer double intervals as this worker aged, but in total it would look something like this:
Eight $10,000 "principal" contributions every 5 years invested at an average 7% return would equal about $525,000 at age 65. I would consider the entire amount ($525,000) now "principal" and at this point in life add an additional phrase to Ben Graham's quote:
"safety of principal and a satisfactory return to help fund a comfortable retirement"

"With that in mind, Mr. Wren is using this pullback as an opportunity to move clients into stocks.
“We have lots of clients with a lot of cash who have missed a lot of this run,” Mr. Wren said. “We'd love to see the market pull back a little more, and then we'll be in there pounding the table.”
...yup. Which is why I'm standing pat. Anyhow, the vast majority of my stuff is in retirement accounts. I don't want to be paying taxes on any of that for as long as I'm able. Reinvest. That's the 11th Commandment.

Hi msf,
You have me digging through more stuff. :)
1993 FCNTX data: has the 3% front load, except retirement accts., asset base now $6.2 billion from $86 million in 1987, ER moved up from .83% in 1987 to 1.13%
Back to my chores.
Take care,
Catch

Reply to @catch22:
I'm really reaching into the deep recesses of my memory, and I may be imagining this, but I have the vaguest recollection of Fidelity adding a load to one or more funds - usually they were dropping them, but they may have added it to Contra post 1988. (I can find prospectuses from 1994 showing the 3% load, and the links I posted state that Contra had a load in 1992.)
That would be consistent with your papers and my more certain memory that I too looked at Contra some time back then (I wouldn't have considered a fund with a load). Like Mark, I took note of the stated mandate to look for beaten down stocks. Mark was attracted to this - I, being quite naive back then, was not. My thinking at the time (and on this point I'm quite clear) was: how arrogant, for Fidelity to think that it can find value that the market doesn't.
Contrarian investing is more subtle than that - it's not finding value that no one else sees, but finding value that few see yet. That is, buying while a stock is still losing favor, but when there is a glimmer of hope.
The first Fidelity fund I picked for my IRA (again naively, because Fidelity was the land of Lynch) was then called Freedom Fund, later called Fidelity Retirement Growth, and now Fidelity Independence. So now you know why its ticker is FDFFX. I picked it because it was supposed to be a go anywhere fund like Magellan, but without the load; also tailored for retirement accounts (it wouldn't pay any attention to tax consequences).
Finally (and I'm pretty confident of my memory here), Fidelity tended to put 3% loads on its growth funds (except for older clunkers like Trend), while it put 2% front end plus 1% back end on its growth and income funds.

The more I review this fund the more I like it. Low beta, low vol, good upside/downside capture and a risk conscious management team with a flexible mandate. Thoughts? Anyone else investing in this fund?
http://www.geminifund.com/ClientSites/SierraMutualFunds/media/document/FundFactSheet.pdf

Recently all I've heard about are the negative consequences over Fed tapering. The market has fallen several percent the past few weeks and this week there was a drastic shift in bearishness in some of the investor polls ala NAAIM and AAII. Guru and TV business pundit Ralph Acampora is now looking for much more downside in the Dow. Normally this bearishness resolves to the upside instead. So we shall see. I am still long LGND with some new money directed to VIAB, but now NPSP is my largest equity holding with ETGLX as my largest (and only) equity fund holding not just due to how well it held during the recent swoon, but because its largest holding is also NPSP. Still hold some floating rate in NFRIX but sold much of it recently.
I never buy a fund based on recommendations on this board but kudos to whoever mentioned ETGLX here a few months back. Please whoever you were stand up and take a bow. It's one of the select few equity funds at all time highs Friday. It's so refreshing to see someone actually recommend a fund that increases one's retirement nest egg instead of the usual groupthink losing or underperforming funds ala AQRNX, SFGIX, PAUDX, and ARIVX to name just a few.

Reply to @Skeeter: Hello. I'd been hanging onto some "new" cash that came to me from a bond that matured, back on 01 July. The shape of my portfolio has, it seems, always been primary for me, rather than timing. What I knew for sure was that I was seriously underweight in USA large-caps. MAPOX has risen quite nicely since I bought it originally, in the Spring of 2012, but lately there's been just a bit of a fall in the share price. Anyhow, I do none of this instantaneously. It's done the old fashioned way, by check. Even after adding that sizable chunk to MAPOX, I'm still very much underweight in USA large-caps. What it is is what it is, for the time being. I'm still not taking distributions from my retirement accounts, yet. MAPOX is in a Trad. IRA. ....And the chunk I put into MAINX is likewise in a Trad. IRA....So the simple tax deduction on my 1040 form for 2013 was a big motivator. ...I first bought MAPOX at $68.05 and yesterday it was at $77.35. As for MAINX: I first bought it at $10.16 and it did well, but has fallen back to $10.24. So, I looked at it as a good buying-moment. ......I also own TRAMX, in the Frontier Markets sector, and do not want to add anything there. It's still less than 4% of my total, and that's a big enough proportion for me. It has pleased me very much!

The two funds you mention are in different categories - they invest in somewhat different asset classes. So the first question is: Are you concerned about having too much allocated to bonds, or the particular funds' performance?
Realistically, in most years, there isn't a heck of a lot of difference between a top quintile intermediate term bond fund and a bottom quintile fund. Maybe a couple of percent or so. Consequently, even though PTTRX's performance this year hasn't been great, it hasn't exactly fallen through the floor, either.
Fidelity's target maturity funds haven't really measured up to those in other families, for a variety of reasons - too many mediocre funds used, choice of glide path, etc. In any case, FFFAX generally underperforms its category, though here too, its performance is pretty much in line with what you'd expect. It is a fund that has settled in to its final allocation ratios (80/20 bonds/stocks - what someone retired for many years might hold in a portfolio).
The average large cap blend fund YTD performance is about 17%, and the average intermediate term bond fund is down about 3%. Blend these in an 80/20 mix (bonds/stocks), and one gets an expected YTD performance around 1%. That's the ballpark in which we find FFFAX.
In these categories (intermediate term bond, target date: retirement), there's often not a huge difference among the funds (excluding the random outliers). And that's what you're seeing here. Neither fund is doing well within its category, but (to quote Data from STNNG), they're functioning within normal parameters.
If you are thinking about changing your portfolio asset allocations, that's a different question. I would not be inclined to use a target retirement fund to shift out of bonds - the shift is too slight (moving from 100% bonds to 80% bonds), and the difference you're seeing in short term performance is because there's such a huge difference between how stocks and bonds have done this year. On average, you'd expect a difference of only a couple of percent, and when you scale that down by a factor of 5 (because only 1/5 of these funds are in stocks), such a change doesn't seem worth making.
So you might think about shifting to equity funds, or at least balanced funds (60/40 stocks/bonds), rather than shifting from a bond fund to one that is still 80% in bonds.

Hi Guys,
To be perfectly transparent, I’ll immediately announce that this post might immediately bifurcate the MFO readership. It was designed to specifically help novice investors; it is likely far too simplistic to guide our market savvy, grizzled investors. The veteran MFO ranks might choose to stop at this juncture.
Over the last few weeks I have been alerted to the rather low knowledge base and sophistication of at least a small number of MFO readers and lurkers. It is somewhat painful to feel their market innocence. Without further education in this arena, these neophytes are doomed to the financial swampland and possible ruin.
Lurking and possibly asking a few questions will inform a little, but that is an unorganized and inefficient way to gain understanding. There are easier routes to the requisite learning that is not unduly costly or time consuming. In this post, I offer a couple of suggestions.
First, Warren Buffet himself provides some very good news with this quote: “Success in investing doesn't correlate with IQ once you're above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.”
So even if you are at the first-grader level in terms of investment sharpness, it will take just a little effort to reach a second grader standing. That modest level of proficiency will be sufficient for survival according to a large cohort of passive Index investor proponents. For example, Allan Roth has authored a book titled “How a Second Grader Beats Wall Street:”. Roth further supports his assessments with a Second Grader portfolio that is scored at the following Market Watch Lazy-man website:
http://www.marketwatch.com/lazyportfolio
All of the portfolios presented in the Lazy-man listing are worthy of consideration for novice investors. But the rookie investor should still seek to comprehend the whys of the investing process.
There are many truly great books that will provide the necessary background and fundamentals to solidly ground a learning investor. I own and have completely absorbed scores of them. Two terrific examples are John Bogle’s very practical “Common Sense on Mutual Funds” and Burton Malkiel’s classic “A Random Walk Down Wall Street” which is often freshened with its many updates.
However, these excellent introductions to investing are dense in data and lengthy in page count. They easily could intimidate an inspiring investor. Fortunately, simplified and much shortened versions of these fine books have been published. I recommend both Bogle’s “The Little Book of Common Sense Investing” and Malkiel’s “The Random Walk Guide to Investing”. Either book can be purchased for under 20 dollars and each is only about 200 insightful pages in length. These are breezy reads.
I also like Richard Ferri’s 142 page book “Serious Money”. Ferri offers this book for free from several Internet sources. He takes a strong advocacy position for Index investing as do the other two recommended short books. In that sense, they are not balanced expositions of all available options. That’s not a bad place to start the education process.
I hesitate to encourage further shortcuts, but many superior reviews of these references are readily accessible on the Web. One nice review of Bogle’s work from the Bogleheads guide that extracts succinct Bogle observations can be found at the following Ranjit Kulkarni Blog address:
http://ranjitkulkarni.com/2011/12/04/the-bogleheads-guide-to-investing/
That’s a pile of passive investment wisdom in a brief format. The quotes are terrific.
The recommended reading list only extols the virtues of passive-side investing. I make no recommendations for the more complex requirements of active investing. That is a multi-dimensional discipline that is evasive and difficult to master, especially since it is a dynamic art in constant evolution.
Note that I said “art” and not “science”. Active investing demands disciplined nuances and money management skills. Also, it requires personal emotional and behavioral controls that are not easy to describe. A very deep understanding of market mechanisms and interactions are mandatory. Experience is a contributing factor towards success. Active investing is definitely not for everyone, especially novice investors.
Novice investors should walk cautiously first, before ever attempting to sprint with the active crowd. They will quickly fall victim to the many traps that await active investing. Remember that even seasoned mutual fund managers overwhelmingly fail to outperform Index products over short 3-year periods. Neophyte investors have little chance for persistency in this quixotic marketplace.
I’ll end with this novice alert: You need to invest in learning about the marketplace and how it works before you imprudently lose your money investing ignorantly. You must master the rules and the odds of the game you need to play to protect your retirement. The learning price tag, in both time and money, is not especially high if it is done in an organized manner.
Best Regards.

Recently Bob C (thanks for all your great comments over the years) was quoted as saying to his clients:
"We are NOT buying FUNDS. We are HIRING MANAGERS!"
With this mandate in mind, I wanted to gather some thoughts, reccommendations, and comments from others on this seemingly important yet often forgotten component of fund selection.
A quick dip into the electronic abyss with my e-seine net captured these quotes:
"According to an analysis prepared for U.S. News by Morningstar, 665 funds have swapped out at least one manager so far this year. If the trend continues at its current rate, that number could swell to more than 1,000 by the close of the year. By comparison, only 783 funds experienced such a change in 2012. In 2011, that number was 747, and in 2010, it was 626.
mutual-funds-swapping-managers-at-alarming-rate
and,
"About three quarters of the portfolio managers in our sample receive performance linked pay from investment advisor. Managers with performance based compensation exhibit superior abnormal performance, especially when advisors link pay to performance over longer time periods. However, we do not find that alternative compensation arrangements such as pay linked to fund assets or advisor profits are associated with better fund performance.
Performance linked pay is more prevalent among larger investment advisors, non-stakeholder portfolio managers, portfolio management teams, and in-house managed funds."
Portfolio Manager Compensation in the U.S. Mutual Fund Industry
How much of your overall portfolio is entrusted to a manager or a management team?
Manager risk potentially equates to manager reward where managers and management teams bring added value to an investement. Conversely, Index funds (index ETFs) have no manager risk/reward, but provide "average returns" that move an investment at least half way along the reward curve. I believe both active (management) and passive (idex) should be part of one total portfolio.
As a way of putting this all together, I believe a percentage of my total investment portfolio should be placed in low fee index funds or index ETFs...or possibly even a single target date retirement funds. All that is required with these investments would be periodic reallocation. VTI ,VT(not sure why this is not hyerlinking... Vanguard Total World), BND in equal amounts (say 20-25% each) would leave me with 25-40% of my portfolio to be invested in non-index funds.
Finding these managed mutual fund gems is why I'm here at MFO and I appreciate this forum.
What are your favorite managed mutual funds that provide a unique strategy (best ideas, niche markets, opportunistic bets, etc.) with managers or mangement teams that provided added value over long periods of time.
What are you favorite fund managers...along with the fund that they manage?

http://www.sec.gov/Archives/edgar/data/1444822/000119312513336644/d581730d497.htm
497 1 d581730d497.htm AQR MULTI-STRATEGY ALTERNATIVE FUND
AQR FUNDS
Supplement dated August 15, 2013 (“Supplement”)
to the Class I and N Prospectus, dated May 1, 2013 (“Prospectus”),
of the AQR Multi-Strategy Alternative Fund (the “Fund”)
This Supplement updates certain information contained in the Prospectus. You may obtain copies of the Fund’s Prospectus and Statement of Additional Information free of charge, upon request, by calling (866) 290-2688, or by writing to AQR Funds, P.O. Box 2248, Denver, CO 80201-2248. The following disclosure is hereby added to the section titled “Closed Fund Policies” on page 168 of the Prospectus. Please review this important information carefully.
AQR Multi-Strategy Alternative Fund
Effective at the close of business September 30, 2013 (the “Closing Date”), the AQR Multi-Strategy Alternative Fund (the “Fund”) will be closed to new investors, subject to certain exceptions. Existing shareholders of the Fund will be permitted to make additional investments in the Fund and reinvest dividends and capital gains after the Closing Date in any account that held shares of the Fund as of the Closing Date.
Notwithstanding the closing of the Fund, you may open a new account in the Fund (including through an exchange from another AQR Fund) and thereafter reinvest dividends and capital gains in the Fund if you meet the Fund’s eligibility requirements and are:
• A current shareholder of the Fund as of the Closing Date—either (a) in your own name or jointly with another or as trustee for another, or (b) as beneficial owner of shares held in another name opening a (i) new individual account or IRA account in your own name, (ii) trust account, (iii) joint account with another party or (iv) account on behalf of an immediate family member;
• A qualified defined contribution retirement plan that offers the Fund as an investment option as of the Closing Date purchasing shares on behalf of new and existing participants;
• An investor opening a new account at a financial institution and/or financial intermediary firm that (i) has clients currently invested in the Fund and (ii) has been pre-approved by the Adviser to purchase the Fund on behalf of certain of its clients. Investors should contact the firm through which they invest to determine whether new accounts are permitted; or
• A participant in a tax-exempt retirement plan of the Adviser and its affiliates and rollover accounts from those plans, as well as employees of the Adviser and its affiliates, trustees and officers of the Trust and members of their immediate families.
Except as otherwise noted, once an account is closed, additional investments or exchanges from other AQR Funds will not be accepted unless you are one of the investors listed above. Investors may be required to demonstrate eligibility to purchase shares of the Fund before an investment is accepted.
The Fund reserves the right to (i) make additional exceptions that, in its judgment, do not adversely affect the Adviser’s ability to manage the Fund, (ii) reject any investment, including those pursuant to exceptions detailed above, that it believes will adversely affect the Adviser’s ability to manage the Fund, and (iii) close and re-open the Fund to new or existing shareholders at any time.
PLEASE RETAIN