New York (HedgeCo.net) – Citigroup recently released its sixth annual Industry Evolution Survey and the results showed that investment managers are working on portfolios that make use of new products and attempt to build dynamic portfolios that blend different asset classes.

Asset managers are increasingly using unconstrained long core, liquid alternative and smart beta products rather than a simple blend of stocks and bonds. This shift in allocations is representative of the ongoing debate between active and passive management to a degree.

“Many in the asset management industry discuss the industry becoming increasingly passive, but our research shows that the industry is instead likely to become more active in the next 5 years as asset managers’ reassert their trading skills away from market indices,” says Sandy Kaul, Global Head of Business Advisory Services within Citi’s Investor Sales unit.

Of the products seeing the greatest growth, liquid alternatives are expected to continue their phenomenal growth with Citi’s survey suggesting that assets in the products could double in the next five years.

Rick Pendergraft
Research Analyst
HedgeCoVest