Frost Investment Advisors has launched the Frost Diversified Strategies Fund, a mutual fund that combines hedge and private equity approaches. The fund seeks to reduce downside volatility while providing upside investment opportunities.

“The Frost Diversified Strategies Fund is one of the first mutual funds to give individual investors access to a vehicle that acts similarly to a hedge or private equity fund,” said Tom Stringfellow, president of Frost Investment Advisors. “The fund will incorporate many aspects of our Optimum asset allocation strategies along with investments in alternative assets, which should help reduce the downside risk of large market drawdowns.

Sixty percent of the fund will invest in traditional assets, including stocks, bonds, cash and listed options. The hedge replication component, the remaining 40% of the fund, will invest in hedge fund replication indexes.

David Telling will be lead manager of the fund, supported by Stringfellow, Brad Thompson and Jeffery Elswick.