Advisors chasing alpha on behalf of their clients have a continuously growing menu of investment options to choose from thanks to the proliferation of alternative mutual funds.

Just last week, Forward Management launched the Forward Managed Futures Strategy Fund, a mutual fund designed to "generate positive returns in varied market environments while maintaining low correlations to major stock, bond, and commodity indexes."

But don't be too disappointed when you read the fine label on the back of the package.

For one, while these offerings boast a zero correlation to stocks and bond funds, alternative mutual funds don't necessarily go north when everything else heads south - and vice versa.

For example, take a look at the Altegris 40 index. This is a compilation of the results of funds run by the biggest managed futures firms in the business.

The index dropped 3.14% last year when the Nasdaq Composite dropped 1.8%, and the S&P 500 was flat.

The same index did perform admirably in the face of the financial meltdown of 2008, when the equities market sank 37% compared. Then, the Altegris 40 rose 15%.

And during the tech bubble burst from 2000-2001 when equities were down 45%, the index rose 43%.

So these funds, contrary to some of their short-term trading strategies, are buy-and-must-hold strategies for advisors.

Then, there are the fees. Some funds and fund of funds currently sport fees in the range of 195 basis points to 386 bps for the privilege of rubbing elbows with industry luminaries such as David Harding of Winton Capital, Patrick Welton of Welton Investment Corp. and/or Salem Abraham of Abraham Trading Co. Those fees compare to conventional stock mutual fund fees, which averaged 95 basis points in 2010, according to the 2011 Investment Company Fact Book.

Who exactly are these luminaries?

Well, the "who" probably won't matter if you aren't familiar with the space. But the "why" does matter-and these traders bring a lot of years of experience plus a lot of infrastructure to the game. When you lump them together under one portfolio, you're getting less single-manager risk and more peace of mind.

For a price, of course.

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