M*: The Past Decade's Worst Alternative Investments

Ted

FYI: Retail alternative-investment funds, practically speaking, are 10 years old. Alternatives have long been in institutional portfolios, but they attracted little attention from retail buyers before the 2008 financial crash. After the disaster, however, the people craved protection, and the fund companies responded. Launching a spate of alternatives funds, they marketed the strategy hard.

The results, so far, have not been good. The problem is not just that the insurance was sold after the fire--a customary practice in investment management--but also that many of the alternatives have been flat-out losers. Even if U.S. stocks hadn't compounded by 13% annually during the decade of 2009 through 2018, those funds would have been poor choices.
Regards,
Ted
https://www.morningstar.com/articles/909394/the-past-decades-worst-alternative-investments.html

hank

HSGFX had an uncharacteristically good 2018. For 1 year it’s ahead 7.5%. However, it’s lost in excess of 5% yearly over the past decade. For holders of this fund I’d suggest forgetting about drinking scotch and instead buying a bottle of Old Crow for around $8.99.

I agree these types of funds are prone to poor returns if for no other reason than their typically high fees. But it should be noted that almost by definition an “alternative” investment is expected to perform contrary to equity and bond markets (ie: go up when they go down). Since bonds and equities had a stellar decade, underperformance of alternatives was expected.