Increasing market volatility prompted financial advisors to shift client portfolios away from stocks in the first quarter toward bonds and alternative assets, Natixis Global Asset Management reported recently. The average moderate-risk portfolio in the report gained 0.6% in the first quarter. However, portfolios with greater diversification fared best.

The top quartile of portfolios gained 1.5%. These had the lowest allocation to stocks (43% of assets), the highest allocation to alternatives (9.7%) and the biggest “diversification benefit”, which measures how much risk is reduced through diversification (22.4%).

According to Natixis, the average portfolio in the first quarter had 50% of assets in stocks, down from 53% a year earlier; 29% in bonds, up from 28%; and 7.7% in alternative strategies, up from 6%. Of the remainder, investors held 7.6% in allocation funds and 5.4% in real estate investment trusts, commodities and cash.

The Natixis Portfolio Clarity Trends Report measured the composition and performance of 352 portfolios that U.S. financial professionals submitted for review from October through March. These were among a broader sample of 2,032 portfolios submitted from January 2013 through March 2016.

Meanwhile, smart beta indexes are coming of age, with growing acceptance and use by global institutional asset owners, according to FTSE Russell’s 2016 global survey. Seventy-two percent of survey respondents said they had implemented or were actively evaluating smart beta indexes, up from 44% in last year’s survey.

Several major firms have jumped into smart beta in recent months. Columbia Threadneedle, part of Ameriprise Financial, said in May it was buying Emerging Global Advisors, which constructs smart-beta portfolios. A week later, Hartford Funds announced it was buying the smart-beta firm Lattice Strategies. BlackRock’s iShares business recently projected that smart-beta ETF assets will reach $1 trillion globally by 2020 and $2.4 trillion by 2025.

Thirty-nine percent of respondents with smart-beta allocations said they had a 20% or higher share of equity in smart beta, up from 18% in 2014 and 20% in 2015, while the share with 5% or less invested decreased from 40% in 2014 to 22% in 2016. The main strategies asset owners used in 2016 were low volatility, cited by 46%; value, 41%; and multi-factor combination, 37%.