The more conservative Market Neutral category performed better but still didn't contribute a positive return (-0.72 percent). Only the relatively small Bear Market category finished in the green at +8.49 percent.

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For investors who don't like the dynamics of bear market funds, is there another fund category with a proven track record of adding positive return in down stock markets?

Actually, there is one–although Morningstar doesn't classify it as alternative–Equity Precious Metals funds.

Decades before alternative investing became popular, these funds were the original alternative fund category, delivering long-term performance in line with the S&P 500, with a modestly negative correlation to the U.S. stock market over the past 45 years.

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For the 12 months ending 1/26/16 Morningstar's Equity Precious Metals fund category declined a whopping 32.48 percent, and in January of 2016 the Philadelphia Gold/Silver Index fell to an all-time low.

However, there are reasons to keep an eye on this category and look for a bottom sometime in 2016.

First, both gold and silver face several years of projected declines in global mine supplies, at a time when demand for precious metals is rising.

Asian countries, especially China and India, have an insatiable appetite for gold, while silver demand is being driven by solar power's growth and accelerating sales of coins and bars.

Second, mining costs have dropped significantly with energy prices and depreciating currencies of countries that export gold (South Africa, Russia, Australia) and silver (Mexico, Peru).

Third, a global currency war is heating up, and gold has a solid track record as the strongest currency to own over the long term, including significant outperformance versus the dollar over the past 15 years.

To learn more, see this informative background paper on precious metals equities, recently published by Brian M. Lucey and Fergal A. O'Connor.

The authors concluded that: 1) although many factors influence prices of precious metals equities over the short run, the price of gold itself is the dominant long-term determinant; and 2) the gold price often is a leading indicator of where minor stock prices will move.

This means you can watch the gold price for a meaningful liftoff and still have an opportunity to enter Precious Metals Equity funds near a secular bottom.

If an extended period of flat or down global stock market performance lies ahead, Equity Precious Metals funds could be one of the few ways to add a positive return component to portfolios, especially if central banks around the world continue to push stimulus accelerators and weaken fiat currencies.