Most alternative investment products are neither well-understood nor on the shopping lists of affluent investors with $500,000 or more investable assets. Moreover, fewer than one-third discuss including alternative investments in their portfolios with financial advisers.

This is according to a survey of 514 affluent investors conducted in late 2006 by Spectrem Group of Chicago and released last week. The poll included questions about hedge funds, real estate investment trusts, commodities, private equities, venture capital and structured products, the latter being any number of synthetically created equity or fixed-income instruments. It is Spectrem's first in-depth research about affluent investors focused exclusively on alternative investments.

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