With respect to @CliffordAsness and his fine colleagues at AQR, I feel like this entire debate is kind of trivial and can largely be boiled down to: In expectation, certainty (e.g. equity + options) should underperform uncertainty (e.g. beta-equivalent equity + cash). If it doesn't, it violates that whole "reward for risk" idea that's central to finance. Now, the defined outcome folks will say, "yes, but what about investment versus investor returns? clients can stick with our products better than the beta equivalent solution!" Which is a nice sounding argument, and may very well be true, but I've never seen it proven. (Though, with enough evidence, you could probably measure the investment gap in the category and draw some broad conclusions.) Anyway, not sure how all the hedged equity folks are avoiding getting caught up in this (there's a lot of money there too), but this whole debate includes them as well. Did I mention rebalance timing luck?