Specialty funds may be completely unique and offer investors a strategy that they cannot find elsewhere, or they may just represent a strategy with an extremely narrow focus.

There are many Specialty Funds, and their investment strategy is bounded only by the imaginations of the companies who create them. They tend to focus on markets that an investor may not have any exposure to otherwise, such as the Ultrashort Japan Fund.

The value proposition of these funds is that they may have hired experts (or specialists) on these niche markets that know more about it than anyone else when their knowledge is combined, and also that these positions can be used as alternative investments with low correlation to the rest of an investor’s portfolio.

It can be very difficult for the average investor to discern how these funds work, and there is a risk that he or she will not adequately understand what he or she is invested in.

Do I Need a Financial Advisor?
Do I Need an Advisor on a Permanent Basis?