Many are familiar with traditional beta-index exchange traded funds that passively track prominent benchmark indices. However, as the industry continues to expand, retail investors can now track alternative investment styles and even tap into strategies previously limited to large hedge funds.

For instance, the IQ Hedge Multi-Strategy ETF (NYSEArca: QAI) is the largest hedge-fund strategy ETF that has been trading since March 2009. QAI is tries to reflect the performance of a customized index that tracks the risk-adjusted return characteristics of hedge funds, writes Corey Hoffstein of Newfound Research for Forbes.

ETF investors may also find other so-called hedge fund replication funds, such as the more recently launched ProShares Hedge Replication ETF (NYSEArca: HDG),

On the other hand, investors can take a broader approach to investing in alternative assets. For instance, the PowerShares Multi-Strategy Alternative Portfolio (NasdaqGM: LALT) and ProShares Morningstar Alternatives Solution ETF (NYSEArca: ALTS) employ a range of alternative strategies to enhance risk-adjusted returns when added to a traditional stock and bond portfolio. Specifically, ALTS includes exposure to long-short strategies, hedge fund replication, managed futures, global infrastructure, merger & acquisitions, private equities and Treasury spread. The actively managed LALT holds a combination of equities, along with financial future contracts, forward currency contracts and other securities.

Looking at the multitude of ETF options, investors are spoiled for choice. Hoffstein, though, suggests tarting off with the replicator HDG and supplement an alternative investment portfolio with something like the multi-strategy LALT, which offers strategies offered nowhere else, such as volatility risk premium and forward rate bias.

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