WSJ's Take On the Week Billionaire Investor Cliff Asness on Managing Market Risk and 'Buffer' ETFs
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Sep 21, 2025 
Cliff Asness, co-founder and CIO of AQR Capital Management, dives deep into the world of market risk and ETFs. He critiques the rise of options-based ETFs, revealing why they often fall short in protecting investors. Asness argues that trading platforms like Robinhood can resemble gambling, exacerbating market inefficiencies. He also discusses the implications of meme stocks and stresses the importance of transparency in earnings reporting, while cautioning about the Federal Reserve's impact on market stability.
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Skip Buffer ETF Shortcuts
- Avoid buffer and hedged-equity ETFs as a simple fix for market fear because they often underperform a basic stock-plus-cash mix.
- If you're nervous, simply sell some stocks or hold cash instead of buying complex option-based products.
Downside Is The Price Of Returns
- The equity risk premium exists because stocks carry real downside risk that investors are paid to bear.
- Attempts to remove that downside without cost are unlikely to be free or neutral over time.
Use Stock-Cash Mix For Protection
- Replicate simple protection by holding a mix of stocks and cash instead of complex option strategies.
- For example, 80% stocks and 20% cash gives proportional upside and reduces downside without exotic fees.