What exactly makes an alternative mutual fund “alternative”? According to Cindy Erickson Zarker, director at research firm Cerulli Associates, the definition of what constitutes an alternative investment fund has changed markedly since 2008. 

At that time, 100 percent of fund managers considered absolute return funds to be alternatives to traditional mutual funds. Such funds judge themselves by their ability to absolutely produce returns, in good or bad markets. They try not to settle for relative performance – returns better than other funds.

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