After the recent swing in the equities market, more anxious investors may consider alternative investments and exchange traded funds to help even out an investment portfolio.

Alternative investments provide exposure to assets with little or no correlation to traditional stocks and bonds, which can help offset a portfolio’s potential losses in volatile conditions. For those with a low risk tolerance, an alternative investment strategy could help protect one’s assets

For example, the IQ Hedge Multi-Strategy ETF (NYSEArca: QAI) is the largest alts-related ETF and 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 through long/short equity, global macro, market neutral, event-driven, fixed income arbitrage and emerging market investments.

The strategy has been outperforming as the markets soured this year, with QAI up 1.3% over the past three months while the S&P 500 index dipped 0.8%.

Investors can also take a broad approach to investing in alternative assets. For instance, the newer PowerShares Multi-Strategy Alternative Portfolio (NasdaqGM: LALT) and ProShares Morningstar Alternatives Solution ETF (NYSEArca: ALTS) also employ a range of alternative strategies to enhance risk-adjusted returns when added to a traditional stock and bond portfolio.

Specifically, ALTS employs long-short strategies, hedge fund replication, managed futures, global infrastructure, merger & acquisitions, private equities and Treasury spread investments. The actively managed LALT holds a combination of equities, along with financial future contracts, forward currency contracts and other securities.

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