Should hedge funds still play a role in portfolios? CNBC.com asked several advisors to offer the pros and cons — in their opinion — and found that, while many are lukewarm about hedge funds per se, they still have a strong interest in employing hedged strategies.
Pro: Finding a good hedge fund manager who can consistently provide true portfolio diversification with a relatively straightforward strategy could be a portfolio plus, said certified financial planner Elliot B. Herman, partner and chief investment officer with PRW Wealth Management.
"Many investors might incorrectly perceive hedge funds to be a risky investment to a portfolio," he said. "While some hedge funds do opt to swing for the fences, a good number are designed to be non-correlated to other financial instruments and also limit volatility within their portfolio and inside a diversified portfolio."