The proliferation of unconstrained mutual funds calls into question the effectiveness of retail investor protections under the Investment Company Act of 1940. Analyzing trading data and prospectuses of a hand-selected sample of all unconstrained mutual funds launched from 2010 through 2015 (N=449), the authors provide an overview of the evolution of unconstrained mutual funds, contrasting core characteristics with publicly available data pertaining to benchmarked mutual fund investment indices. The article demonstrates that unconstrained mutual funds share multiple investment strategy and risk attributes with fixed income hedge funds. The authors evaluate associated investor protection concerns.

Keywords: Unconstrained Mutual Funds, Private Fund, Mutual Fund, Hedge Funds, Hybrid Funds, Liquid Alternative Assets, Retail Alternative Funds, Asset Classes, Proliferation, Confluence, Investment Styles, Securities Regulation, Retail Investors, Investor Protection, Risk Attributes, Investment Strategy

JEL Classification: F33, G15, G23, G28, K22

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