This recommended investment portfolio is one of 20+ mutual fund portfolios that we've assembled for investors with different time horizons and risk-tolerance levels to consider. Visit our Portfolio Finder to see them all. View Another Investment Portfolio: Aggressive ETF Portfolio Balanced ETF Portfolio Balanced Mutual Fund Portfolio Contrarian ETF Portfolio ETF Portfolio for Growth and Income ETF Portfolio for Long-Term Growth Fidelity Moderate ETF Portfolio High-Income Combo Portfolio High-Yielding ETF Portfolio Higher Risk, Higher Yield ETF Portfolio Higher Risk, Higher Yield Mutual Fund Portfolio Kiplinger 25 for College: 6-10 years away Kiplinger 25 for Income: 5 Years or less Kiplinger 25 for Retirement: 11+ years away Lower Risk, Lower Yield ETF Portfolio Lower Risk, Lower Yield Mutual Fund Portfolio Multi-Asset ETF Portfolio Multi-Asset Mutual Fund Portfolio Overseas Portfolio for ETF Investors Schwab Growth ETF Portfolio Super-Simple Balanced Mutual Fund Portfolio Tax-Exempt Income Portfolio Vanguard Conservative ETF Portfolio Vanguard Index Funds to Buy and Hold Forever Multi-Asset Mutual Fund PortfolioFor investors who want out-of-the-box choices 40% Stocks | 15% Bonds | 45% Alternative | Data through January 31, 2020 FUND NAME SYMBOL % OFPORTFOLIO YTDRETURN 1-YRRETURN 3-YRRETURN 5-YRRETURN 10-YRRETURN MAX LOAD EXPENSE RATIO Fidelity Convertible SecuritiesFCVSX5%0.99%20.35%11.33%6.61%9.31%none%0.51% Harbor Bond InstlHABDX102.49.644.863.254.1none1.04 Merger FundMERFX200.415.695.353.673.09none1.91 Metropolitan West Unconstrained Bond MMWCRX100.755.833.592.9—none1.03 Data not foundTFSMX15—————none— Data not foundVTWSX40—————none— 1000.453.72.491.681.5 0.61 ** Closed to new investors. # Closed to new investors; other share classes are available. r Maximum redemption fee charged when you sell shares. s Front-end load; redemption fee may apply. — Fund has not existed for the specified time. Source: Morningstar, Inc.. There's been an explosion in the number of alternative investment strategies available through mutual funds — a welcome development for investors who want their portfoio to be as disconnected as possible from the market's gyrations. They don’t promise to beat the broad market, but they will offer diversification (they will zig when Standard & Poor’s 500-stock index zags, for instance). Bear in mind, however, that even though these kinds of investments can help manage risk in your portfolio, they come with risks of their own. Investors should add alternative investment exposure to their core portfolio of stocks, bonds and cash—not replace it. That's why we've used them to leaven a portfolio that includes stock (40%) and bond (15%) standbys. The mutual fund portfolio includes a merger-arbitrage fund (MERFX) that buys shares of takeover targets after a buyout or merger is announced; a market neutral fund that invests in small and midsize companies but keeps an equal ratio of long and short positions (TFSMX); and a go-anywhere bond fund (MWCRX).