There are many types of ETFs and they are not all equal. Some are for key asset classes and some are for alternative asset classes.
ETFs for Alternatives
Commodities don’t fit most portfolios.
It can be an illiquid and challenging asset class.
Another asset class that doesn’t fit most portfolios are MLPs (Master Limited Partnerships).
A key ETF for this asset class, Alerion’s ETF for the MLP sector (MLP = Master Limited Partnership), AMLP, has a lot of traction and attention.
I am a firm believer in not being a Financial Guinea Pig.
So while these can be captivating sectors to consider for Alternative Investments, I stay on the sideline and encourage others to do so as well.
If the Commodities ETFs are the new kids on the block, then the Master Limited Partnership ETFs are the baby just brought home.
Buyer Beware
Buyer Beware definitely still applies to new Sector ETFs coming out that have yet to be tested.
There’s alot of interest in Alternative Investments right now.
Does it intersect with your goals, your risk tolerance, your timeframe, and your expectations?
These Alternatives ETFs haven’t been tested by time, and there’s an added layer of risk because there isn’t much performance data.
Next Step
Ready to take the next step and work with a fee-only CFP? Reach out to schedule a Discovery Meeting to learn more.