FINRA Issues New Investor Alert: "Alternative Funds Are Not Your Typical Mutual Funds"

FINRA issued a new investor alert, Alternative Funds Are Not Your Typical Mutual Funds, to inform investors considering an investment in alternative funds to be aware of the unique characteristics and risks of these investments. According to the alert, as alternative funds are capable of investing in assets such as global real estate, commodities, leveraged loans, startup companies and unlisted securities, they potentially offer exposure beyond traditional stocks, bonds and cash.

For customer protection purposes, FINRA urges investors considering alternative funds to ensure that they fully understand the following elements of the fund:

• Investment Structure;
• Strategy Risk Factors;
• Investment Objectives;
• Operating Expenses;
• Fund Manager; and
• Performance History.

Click here to view FINRA Alert in full (links externally to FINRA website).