Build a better mousetrap, and the world will beat a path to your door. For investment firms, the “better mousetrap” is a fund that has appeal because it promises a good return without exposing the customer to more risk than he can bear.

For more than a decade, contenders for the “better mousetrap” designation have included mutual funds that use hedge fund strategies. Such funds seemed to offer the best of both worlds: hedge-fund-like diversity and ability to adapt to different market environments without costing as much to participate. And they have the liquidity and transparency (investors