A. Alternative funds became popular since the bear market of 2007-2009, as investors looked for other assets and strategies in order to diversify the traditional stocks/bonds portfolios. Unfortunately alternative funds have mixed records.
What are Alternative funds?
Below is a list of the major categories of alternative funds:
- Long/short Equity funds
- Energy Limited Partnership funds
- Market Neutral funds
- Managed Futures funds
- Commodities funds
- Multi-alternative funds
Do Alternative Funds Perform Better Than Stock Funds?
Unfortunately, alternative funds generally trailed S&P 500' performances in the past 5 years, as the chart below indicates.