Since the credit crisis where the Standard & Poor's 500 fell 37% in one year, there has been a flight from the traditional equity mutual funds to fixed income, index and alternative funds. The old model, where an investor was diversified based on style (growth or value), capitalization and geography, is no longer performing well. They are gravitating to a barbell model with allocations to passive indices and alternative investments. According to eVestment Alliance, $90 billion and $29.3 billion were redeemed from US large cap growth and value equity funds. This is pressuring traditional asset managers and subsidiaries of banks and insurance companies to change their practices.
For example, Francis Ghiloni, director of distribution and client management for Scottish Widows Investment Partnership (SWIP), noted that the barbell approach is more popular since traditional investments are encountering higher volatility and risk. SWIP re-organized their investment team along global lines, replacing the former regional coverage model, and promoting their quantitative research team. Aviva Investors is also moving assets from fundamental to quantitative analysis teams.
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