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The UK-registered Oeic will maintain roughly equal weightings in 10 uncorrelated asset classes that are subject to an ongoing review. The firm assigns each asset class a best-of-breed fund.

Skandia claimed the strategy would typically generate absolute returns over discrete yearly periods and has placed it in the IMA's new Absolute Return sector.

Five of the holdings at launch on 23 June link to the commodity boom – the £1.6bn BlackRock Gold and General fund, KBC ECO Water, TG RARE Infrastructure, Lehman Commodity Plus and a passive timber investment from Mellon Bank.

Although four of these are long only, chief investment officer James Millard maintained they helped produce an absolute return. "You don't need to hedge because they are less correlated."

The fund also opened with currency play Morgan Stanley FX Alpha Plus RC400, long/short equity mandate JPM Highbridge Statistical Market Neutral and volatility specialist Commerzbank UK Premia.

Alternative Investments includes two other hedge-type strategies – global macro portfolio Morley Absolute Tactical Asset Allocation and Fulcrum Alternative Beta Plus, which the manager terms a fund of hedge funds replacement rather than a replicator.

Like the replicators, Mr Millard observed the fund had a short track record, but offered investors fund of hedge fund-type strategies more cheaply.

Alternative Investments requires a minimum lump sum of £1000 or £50 monthly. The anticipated total expense ratio is 2.45 per cent.

Fund Facts:

Initial charges: 5 per cent

AMC: 1.5 per cent.

Commission: 3.5 per cent

Trail: 0.5 per cent