Despite all the attention hedge funds garner, half of affluent investors seem ambivalent toward them, according to a recent study. Only 55 percent of respondents to U.S. Trust’s latest Survey of Affluent Americans believe hedge funds offer a good return on their investment, and just 51 percent believe they can be used to reduce portfolio risk.

More distressing, perhaps, for hedge fund managers, nearly eight in 10 successful investors claim that a good hedge fund is difficult to find, and report that these alternatives are difficult to investigate. Respondents were asked to consider investments having a “significant” impact on wealth generation, and they most often cited stocks (81 percent) and real estate (80 percent). Hedge funds only placed ahead of government securities and bonds, and cash (or equivalents).

Overall, investors are pleased with investment performance. Eight in 10 met or exceeded their portfolio expectations over the past fiscal year. However, just over half of the investors believe the domestic stock market has become riskier, and 18 percent plan to move assets out of it. Interestingly, foreign markets may be seen as a safer bet: Only 8 percent with foreign assets plan to move out of international markets.

Issues that most concern respondents include the United States losing its economic edge on the rest of the world and the long-term effects of the budget deficit on the economy. Other pressing concerns include the next generation of Americans having a harder time financially, environmental issues and high taxes eroding their estates.

U.S. Trust, a subsidiary of Charles Schwab, has been conducting its survey for 26 years.

—Pete Caulutti