Morningstar – A new breed of clone funds seeks to capture "alternative beta." It wasn’t long ago that hedge funds were on the very cutting edge of finance. Their pitch was simple: they could deliver pure alpha , rather than the heavy doses of beta being dished up by long-only mutual funds. The rub was that you’d have to pay dearly for that elusive component, and to get it, managers would often have to operate in inefficient markets where liquidity and capacity were scarce. Now that some of the mystique has left the asset class, a new concept has made its way to the investing frontier: hedge fund replication.