Active Extension

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November 24, 2025 - Jeffrey Cao Peter Hecht Dave Kershner Bill Latimer Peihan Zhao Topics - Relaxed Constraint Long-Short Equities Portfolio Risk and Performance With equity valuations elevated and future return expectations subdued, investors face mounting challenges in meeting long-term objectives through traditional passive or long-only active allocations. Active Extension (AE)—a long-short framework that uses modest leverage to short less attractive stocks and overweight more attractive stocks—offers a liquid, capital-efficient alternative. By relaxing the long-only constraint, AE enhances active risk efficiency, mitigates index concentration, and expands the opportunity set for generating alpha. Historical evidence shows that well-managed AE strategies have delivered higher active returns than long-only peers, 1 1 Close Refer to Exhibit 5 herein. potentially translating into meaningfully greater long-term wealth. When implemented by skilled managers with experience in shorting, trading, and risk control, AE may improve diversification and portfolio efficiency—providing investors with a compelling approach to active equity investing in today’s challenging environment. Exploring Capital Efficiency Alternative Thinking - September 15, 2025 Alternative Thinking - September 15, 2025 A New Paradigm in Active Equity White Paper - February 5, 2025 White Paper - February 5, 2025 Understanding Relaxed Constraint Equity Strategies White Paper - February 3, 2017 White Paper - February 3, 2017 Relaxed-Constraint Portfolios Alternative Thinking - 2Q 2016 Alternative Thinking - 2Q 2016 This document is not intended to, and does not relate specifically to any investment strategy or product that AQR offers. It is being provided merely to provide a framework to assist in the implementation of an investor’s own analysis and an investor’s own view on the topic discussed herein. This document has been provided to you solely for information purposes and does not constitute an offer or solicitation of an offer or any advice or recommendation to purchase any securities or other financial instruments and may not be construed as such. The factual information set forth herein has been obtained or derived from sources believed by the author and AQR Capital Management, LLC (“AQR”) to be reliable but it is not necessarily all-inclusive and is not guaranteed as to its accuracy and is not to be regarded as a representation or warranty, express or implied, as to the information’s accuracy or completeness, nor should the attached information serve as the basis of any investment decision. This document is not to be reproduced or redistributed to any other person. The information set forth herein has been provided to you as secondary information and should not be the primary source for any investment or allocation decision. Past performance is not a guarantee of future performance. Diversification does not eliminate the risk of experiencing investment losses. This material is not research and should not be treated as research. This paper does not represent valuation judgments with respect to any financial instrument, issuer, security or sector that may be described or referenced herein and does not represent a formal or official view of AQR. The views expressed reflect the current views as of the date hereof and neither the author nor AQR undertakes to advise you of any changes in the views expressed herein. The information contained herein is only as current as of the date indicated, and may be superseded by subsequent market events or for other reasons. Charts and graphs provided herein are for illustrative purposes only. The information in this presentation has been developed internally and/or obtained from sources believed to be reliable; however, neither AQR nor the author guarantees the accuracy, adequacy or completeness of such information. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be relied on in making

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