Disruptive innovations changes that alter behavior such as the introduction of the index fund or exchange-traded funds can have a big impact on investment management, Blake Grossman, chief executive officer of Barclays Global Investors, told the CFA Institutes annual conference on May 13.
Areas where BGI officials are focusing their research and development efforts to stimulate innovation, Mr. Grossman said, include:
• defined contribution plans, where the manager is researching how participants can invest through the whole cycle of savings to spending assets;
• ETFs, where researchers are working to bring to market the next generation of funds, such as those mimicking alternative betas or providing active strategies;
• crossing asset class boundaries, such as integrating insights from equity and fixed-income markets, will continue to develop and may be expanded into other asset classes;
• technology and data, where BGI officials hope to model holdings at more detailed level and seek to generate more proprietary and little-used data sources; and
• alternative beta, where different hedge fund returns can be decomposed and captured in a systematic fashion.