The S&P 500 may have soared last year, but investors have not forgotten the downturn of 2008 and are clamoring for actively managed low volatility funds, says Steve Graziano, president of Touchstone Investments. Graziano says his arbitrage funds have been popular, especially as deal flow has picked up. Covered call funds have also been in demand, says Graziano, as investors are sacrificing their upside for yield and stability. Finally, Graziano has seen large flows into oft-neglected mid-caps.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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