BlackRock Inc., the world's largest asset manager, and Manning & Napier are among the managers that use strategies such as shorting stocks and trading derivatives in their target-date funds. J.P. Morgan Asset Management and Voya Investment Management are considering adding similar strategies, executives told Reuters.

A hedge-fund style can be more expensive and riskier than just buying stocks and bonds, and workers may not fully realize their exposure, retirement consultants said. On the other hand, they can act as a shock absorber to events like the 2008 financial crisis.

Target-date funds, where these strategies are being used, have more than doubled their assets to $701 billion since 2010, according to Morningstar. U.S. legislation in 2006 allowed employers to automatically enroll employees into these funds, a default feature that has spurred asset growth.

In a target-date fund, retirement savers choose or are placed in a fund based on their expected retirement year and the portfolio adjusts its mix of assets, which traditionally were stocks and bonds, to become less risky over time.

About 41 percent of 401(k) plan participants invest in target-date funds, compared with 20 percent five years ago, according to the SPARK Institute, a Washington DC-based retirement plan lobbyist.

As of December 2013, 14 percent of target date fund managers had allocations to hedge fund strategies, up from 10.5 percent three years ago, according to retirement plan consultant Callan Associates.

The median target date fund allocation to hedge fund strategies rose to 5 percent in 2013, from 1.86 percent in 2011.

Many target date funds saw their performance plummet during the financial crisis because they were too heavily exposed to stocks and are turning to hedge strategies to prevent that from happening again, said Lori Lucas, defined contribution practice leader for retirement plan for Callan.

Meanwhile, these funds' expenses have risen. A 2050 target date fund with a 5 percent allocation to hedge funds carries a 60 basis point expense ratio, nine basis higher than an average target date fund, according to Callan. That would add about $450 a year in fees to a retirement account containing $500,000.

Asset managers say the true value of adding alternative strategies, which are designed to protect investors from downside risk, will not prove itself fully until equity markets stumble.