Hedge funds are proving increasingly popular in the current economic climate, new research suggests.
Savvy investors are looking to hedge funds to yield strong returns in the current economic climate, the Association of Investment Companies (AIC) has revealed.
A poll conducted by the AIC found that of the 1,300 private investors surveyed, a total of 15 percent felt hedge funds could offer potentially strong returns.
While three percent currently plan to invest in hedge funds, a further 46 percent claim they may make a future investment.
Annabel Brodie-Smith, communications director for the AIC, stated that closed-ended hedge funds are available to investors from all backgrounds and that investors can access a "much higher level of transparency" than they have previously been able to.
"It's important to have a balanced portfolio, but providing this is in place, listed hedge funds and fund of funds can enhance the diversity of your portfolio," she explained.
Ms Brodie-Smith added that it is important for investors to "do their homework" when selecting a hedge fund to invest in.
She suggested that taking independent financial advice may be the best course of action if investors are unsure of their options.
Roberto Cagnati, head of fund management at Swiss-based Partners Group, told Reuters that the credit crunch is providing investors with a new opportunity to consider top hedge funds.
