With exchange traded funds, any investor can access broad alts strategies as well. For instance, the IQ Hedge Multi-Strategy ETF (NYSEArca: QAI) provides a diversified mix of alternative strategies, including multiple hedge fund investment styles, such as long/short equity, global macro, market neutral, event-driven, fixed income arbitrage and emerging markets. [Hedge Rate Risk with a Multi-Strategy ETF]
The ProShares Morningstar Alternatives Solution ETF (NYSEArca: ALTS) also employs long-short strategies, hedge fund replication, managed futures, global infrastructure, merger & acquisitions, private equities and Treasury spread investments.
The SPDR SSgA Multi-Asset Real Return ETF (NYSEArca: RLY) includes exposure to natural resource producers, commodities, real estate investment trusts and Treasury inflation protected securities.
The actively managed PowerShares Multi-Strategy Alternative Portfolio (NasdaqGM: LALT) holds a combination of equities, along with financial future contracts, forward currency contracts and other securities.
Potential investors should be aware that these types of investments are not meant as growth strategies to generate outsized returns in investment portfolios. In reality, these strategies are doing exactly what they were made for, diminishing volatility. Consequently, in bullish market conditions, the strategies may underperform, but if the markets turn, alts can shine.
Financial advisors who are interested in learning more about alternative strategies can attend the ETF Trends Virtual Summit, an online event, on January 20, 2016.