This active ETF does not track a specific index. Instead, it runs several alternative strategies at the same time, including hedged equity, long/short, event-driven, managed futures, commodities, real estate, relative value and global macro.

It suits investors who want the diversification benefits of a traditional stock and bond portfolio while also considering exposure to alternative strategies.

The ETF is actively managed by First Trust.

The fund does not follow a specific benchmark. The management team adjusts the weights of various alternative strategies at its discretion, aiming to secure sources of return with low correlation to traditional assets. Strategy allocations can shift flexibly depending on the market environment.

• Exposure to multiple alternative strategies in a single product
• Active discretionary management rather than passive index tracking

Assets under management (AUM) stand at $442.1M, and the total expense ratio is 1.18% per year.

The similar multi-asset and alternative ETFs shown in the table each have different strategy mixes and fee structures, so investors looking for low-correlation sources of return should compare differences in strategy composition.

Because it is an active product with no benchmark index, its return profile depends on the management team's allocation decisions and tends to follow patterns different from traditional stock and bond markets.

As interest rates and equity volatility rise, investors who feel a traditional stock and bond portfolio alone offers insufficient diversification have steadily turned their attention to alternative strategy products.

Its strength is the diversification of gaining multiple alternative strategies in one product. Its weaknesses are the uncertainty of strategy allocation under active discretionary management and a relatively high fee burden.

CGBL, ALLW and others in the table lean toward balanced products that hold both stocks and bonds, while IALT, DRSK and others are active alternative products that place more weight on defensive risk management. Other products worth a look beyond the table include QAI, which indexes hedge fund strategies, WTMF, which focuses on managed futures, RLY, which adds real return and real asset exposure, and MNA and ARB, which specialize in merger arbitrage. Together they allow a more detailed comparison across alternative strategies.

Here are the points to review before investing in LALT. Because it is an active multi-strategy product with no benchmark index, you should thoroughly check its strategy mix, fees and the scope of manager discretion in advance.

Because this is an active product with no passive index, the management team's allocation judgment is the key variable for performance. If several strategies enter losing phases at the same time, the diversification benefit may fall short of expectations.

It is a multi-strategy alternative ETF suited to investors who want sources of return with low correlation to traditional assets. However, the uncertainty of active discretionary management and the relatively high fees should be carefully weighed before investing.