Goals of Alternative Investments

Risk Reduction

A peak-to-valley decline measures the worst price decline from a historical peak during a specified time frame.

Using month-end values from January 1990 through December 2014, the chart below measures the worst peak-to-valley declines and average annual returns for managed futures and hedge funds alongside several other major indices. Over the last 25 years, the largest peak-to-valley declines for managed futures and hedge funds compare favorably to the largest declines seen in domestic and international stocks, commodities and real estate.

Largest Drawdowns | Indices


As with any type of investment, alternatives can have risk. This includes risks associated with the use of leverage, short sales, options, futures, derivatives, emerging markets, illiquid securities and limited regulatory oversight.

See Glossary of Terms for index definitions and risks.

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