While some investments are designed to be used by novices with little interest in aggressively managing their accounts — a target - date fund, for example —
liquid alternatives require more diligence, especially if they are presented as stand - alone options.
Not exact matches
And, unlike hedge funds,
liquid alternative funds must adhere to the same regulatory requirements as US - registered mutual funds, sharing information that private placements are not
required to disclose.
An
alternative is to use pre-made formula that's in
liquid form already, since this type only
requires opening and feeding immediately - no mixing
required.
Implementation of
alternative strategies in «40 Act» formats
requires higher balances of cash and
liquid assets — particularly for the pari passu offerings — which is a drag on returns.