CCLS Risk Management Update Profile: Alternative Mutual Funds

At the end of each month, Core Compliance & Legal Services, Inc. (CCLS) publishes a Risk Management Update (RMU), an in-depth article written by one of our staff members on a current relevant topic in the compliance, securities and investment industry. In late August 2013, CCLS released an RMU, written by Compliance Consultant Kris Gruben, which addresses the complex portfolio risks and options available in the form of alternative mutual funds.

An optimal way for clients to “diversify their portfolios,” alternative mutual funds, according to Gruben, come in the form of an “open-ended,” daily-priced mutual fund, or in the form of a secondary-market-traded Exchange Traded Fund (ETF). As a fund holding “non-traditional investments,” these funds hold “unique characteristics” that make them hold higher risks to investors – risks which should be thoroughly considered in the decision to utilize their use. Gruben outlines the risks involved in alternative mutual funds, including strategy risks, investment risks, investment structure risks, as market risk/limited performance history, as well as strategies that compliance firms may consider in monitoring alternative mutual fund sales.

To read a PDF of the article “Alternative Mutual Funds,” please click here. To browse our RMU library, including insightful articles on a wide range of industry topics, please click here.

For more information, or for assistance on other compliance topics, please contact us at (619) 278-0020, or email us at

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