In today’s volatile financial environment, investors are turning to Alternative Investment Funds (AIFs) to manage risks and reduce market exposure. AIFs offer diversification into alternative assets like hedge funds, private equity, and real estate, which have low correlation with traditional markets. This makes AIFs effective in stabilizing portfolios through strategies like market neutrality and risk management. Different AIF categories respond uniquely to market fluctuations, with Category 1 focusing on long-term assets and Category 3 employing arbitrage strategies. Historical data shows AIFs performed better than traditional investments during crises, demonstrating their resilience and potential for higher risk-adjusted returns.