The IQ Hedge Macro Tracker ETF (NYSEArca: MCRO) was up 0.43% in August. MCRO tries to replicate the risk-adjusted return characteristics of a global macro strategy that takes long and short positions on various assets based on the overall economic and political views of a number of countries or their macroeconomic principles.
The IQ Hedge Market Neutral Tracker ETF (NYSEArca: QMN), which tries to give consistent returns in any market with low volatility, returned 0.23% last month. The ETF is the first to use a market neutral strategy by copying market neutral hedge funds.
Related: ETF Performance Report: August 2017
During periods of market selling in traditional assets, these types of liquid alternative strategies can experience lower drawdowns or even positive returns, which may help buoy an investment portfolio during troubled times.
Potential investors, though, 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.
For more information on liquid alts, visit our alternatives category.