“Managed-futures strategies tend to have very low, and even negative, correlations to the stock market; they gained notice after 2008, when the small number of mutual funds in the category and their many hedge fund counterparts held up very well,” Charlson said.
Others were also only slight lower over the period. For instance, the First Trust Long/Short Equity ETF (NYSEArca: FTLS) decreased 6.0 and ProShares RAFI Long/Short ETF (NYSEArca: RALS) was 0.3% higher. These long/short strategies take both long positions in U.S. equities and pare bets with short positions.
Investors can also take a look at ETFs that track a basket of alternative investment strategies. For instance, the newer PowerShares Multi-Strategy Alternative Portfolio (NasdaqGM: LALT) and ProShares Morningstar Alternatives Solution ETF (NYSEArca: ALTS). 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. Over the period, LALT fell 0.7% and ALTS declined 3.9%. [Alternative Investments, ETFs Are Increasingly Popular]
In contrast, the S&P 500 dropped 9.4% and the MSCI World Index fell 8.9% from August 17 through August 24.
For more information on alts investments, visit our alternatives category.
Max Chen contributed to this article.