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Is AQR Large Cap Defensive Style I (AUEIX) a Strong Mutual Fund Pick Right Now?

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If investors are looking at the Mutual Fund Equity Report fund category, AQR Large Cap Defensive Style I (AUEIX - Free Report) could be a potential option. AUEIX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

AQR Funds is based in Denver, CO, and is the manager of AUEIX. Since AQR Large Cap Defensive Style I made its debut in July of 2012, AUEIX has garnered more than $3.90 billion in assets. The fund is currently managed by a team of investment professionals.


Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 14.08%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 14.32%, which places it in the bottom third during this time-frame.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 15.72%, the standard deviation of AUEIX over the past three years is 16.38%. Over the past 5 years, the standard deviation of the fund is 14.4% compared to the category average of 13.96%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.88, so it is likely going to be less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a negative alpha of -0.08, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.


Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, AUEIX is a no load fund. It has an expense ratio of 0.37% compared to the category average of 0.92%. AUEIX is actually cheaper than its peers when you consider factors like cost.

This fund requires a minimum initial investment of $5 million, while there is no minimum for each subsequent investment.

Bottom Line

Overall, AQR Large Cap Defensive Style I ( AUEIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a great potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Mutual Fund Equity Report, make sure to go to for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.

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