Assets in130/30 funds will explode at an annual compound growth rate of 141% over the next three years, rising from $140 billion this year to $2 trillion by 2010, according to TABB Group. By comparison, assets in actively managed equity funds will rise a scant 3%.

“A major change is under way at alpha-seeking firms,” said Larry Tabb, chief executive officer at TABB. “They are becoming more creative, moving overseas and toward frontier markets, moving up and down the capital structure, moving toward shorter-term, event-driven strategies and longer-term holding strategies that resemble private equity-type investments.”

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.