While many retail and institutional investors gravitate to high-performance, high-risk hedge funds and private equity, they also continue to pour money into the opposite end of the spectrum: low-cost exchange-traded funds, Reuters reports.

Deborah Fuhr, executive director of investment strategies at Morgan Stanley, called this predilection for both types of investments a "barbell," with high-risk on one end, and low-risk on the other. Luckily, she said, investors are balancing their increasing tolerance for risk with exchange-traded funds.

"The reason people are using [ETFs] is because the view of the world has expanded, particularly as emerging market returns have been so impressive over the last few years. Many people are not able to pick stocks in those areas," Fuhr said.

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