Mutual funds pitched to retail investors as hedge funds for the everyman promise to shield them from market gyrations, but many in 2015 proved just as exposed to market risks as their plain-vanilla counterparts.

In fact the gap between the best and worst performers among alternative mutual funds has grown so big that picking one might entail risks similar to those that investors seek to avoid.

"Manager selection is always important and especially important in alternatives," said Lawrence Restieri Jr., an executive at Goldman Sachs Asset Management. "You just end up with a wider range of outcomes."

Last year, 64 alternative mutual funds were liquidated or merged into other funds, compared with 40 funds that were weeded out in 2014, according to a Reuters analysis of Morningstar Inc. data.

Whitebox Advisors LLC, a hedge fund firm that lists efficient risk reduction as its top investment principle, last month became the latest money manager to close its mutual funds to new investors. The largest of the shuttered funds, Whitebox Tactical Opportunities, shed a fifth of its value over the last year, according to Morningstar.

In a market with few clear winners and many underperforming stocks and other assets, many funds struggled with a basic task: picking winning stocks.

Many bet on losers and made things worse by selling short those that turned out to be the winners.

"It was a really tricky market where it was easy to get tripped up," said Morningstar alternatives analyst Jason Kephart.

"I wouldn't be surprised to see more closures if it continues to be a challenging environment," he said.

The "liquid alts" have grown in popularity since the financial crisis as financial advisors marketed the funds to investors as investments that do not move in tandem with stock and bond markets--particularly when both assets are losing value.

Assets of U.S. alternative funds tracked by Morningstar grew to $212 billion last November from $87 billion in November 2009 and consumers invested a net $18.3 billion in those funds through November, roughly at par with $19 billion in 2014.

To limit swings in price, their managers use hedge-fund like strategies, including trading in futures, commodities, and short-term rates.

But unlike hedge funds, the "liquid alternative funds" do not lock in investors for set periods, allowing them to pull out money at any time. That may force managers to sell into a tumbling market to the detriment of longer-term performance.

Winning Quartet

In fact many such funds came under pressure during the stock market's sell-off in August and in a year of negligible gains across financial assets and products many alternative mutual funds did even worse, posting negative returns.

One challenge was that very few stocks delivered the bulk of the gains. So few that investors coined a term "FANG" for the winning quartet of Facebook Inc., Inc., Netflix Inc. and Alphabet Inc., better known as Google .

In addition, many of the alternative investments turned sour. Small companies trading at apparent discounts lost even more; exposure to China, energy and commodity markets as well as high-yield debt, all brought losses.