Buyer beware! The Financial Industry Regulatory Authority today issued an investor alert regarding the burgeoning alternative mutual fund asset class.

According to FINRA, in addition to the usual market and investment specific risks mutual funds have, alternative mutual funds carry additional risks from the strategies they use. For example, market-neutral funds tend to have significant portfolio turnover risk that can result in higher costs. Similarly, a distressed bond fund is likely to have significant credit risk.

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