AQR made a splash in August when it filed for an exemption that would allow it to enter the exchange-traded fund business. Many observers expect the big quant shop to make the ETF foray, even though its executives are keeping quiet.

AQR is the nation’s largest provider of liquid alternative mutual funds, and has $27 billion in assets in that area. But the Greenwich, Conn.-based firm has been curtailing some of its work in those assets.

Earlier this year, the firm closed its equity market neutral funds and its long/short equity fund. The latter had annualized returns of 15% for the three-year period ending August 31. That kind of performance can attract lots of assets and lead to capacity constraints.

Instead, the firm is turning its attention to the long-only world, particularly the international arena. Many advisors may not be aware of it, but the firm has $90 billion of its assets in traditional long-only vehicles, including institutional accounts and mutual funds.

“Before AQR was founded [in part by leading quant and Goldman Sachs alumnus Cliff Asness], we had a long-only business when we worked together at Goldman,” says Jacques Friedman, the principal and head of AQR’s stock selection committee. In 2000, two years after the firm was founded, it launched its first long-only international account for an institutional client.

As of July 31, the asset manager’s International Equity fund had five-year annualized returns of 11.06%, which bested the MSCI EAFE index by 200 basis points a year. The firm also has international funds in several different style spaces, including both defensive and momentum funds.

Not surprisingly, AQR’s long-only strategies are as mathematically rigorous as its alternative ones. Its quantitative methodologies rank thousands of companies around the world by more than 100 different statistics, ranging from price-to-cash flow and price-to-sales to trailing and forecast earnings, along with many other more exotic metrics. Ultimately, each company in a benchmark gets a score.

For example, a company that AQR ends up scoring highly (which it then would overweight in its portfolio) could score well on valuation metrics like price-to-earnings and price-to-book value ratios, score poorly on momentum metrics like 12-month return momentum, and have average scores on quality measures like debt-to-equity ratios. It’s all about how the aggregate score of a company compares with a universe of its peers.

Friedman says AQR has stable weights for these various signals and indicators, as the clairvoyance that the markets assign to different metrics tends to shift frequently. Indeed, many asset managers have shifted their focus to revenues in recent years as companies have used financial engineering to manage earnings. “Our model has been designed to work in different environments,” Friedman says.

What makes AQR’s international funds different is that the firm uses derivatives to increase, decrease or hedge out various exposures. “We could have separate opinions on the yen and Japan than we have on Toyota, for example,” he explains. So theoretically, if AQR liked Toyota but was neutral on the broader Nikkei index and negative on they yen, it could adjust the portfolio accordingly.