How to Choose a Liquid Alternative Mutual Fund That Suits You Best

Liquid alternative mutual funds may be increasingly new to retail investors but these strategies have been used for decades by institutions, said Walter Davis, Alternative Investment Strategist for Invesco. Davis added that individual investors seeking to add hedged strategies to their portfolios should see how the fund performs in a down market. He also said investors should see the fund's track record if the strategy was employed in a hedge fund before being adapted into a mutual fund. Finally, Davis said investors should have clear goals in mind as to how the addition of a liquid alternative fund will enhance their portfolios, whether it be reducing correlation or adding new return streams.