Private-equity exchange traded funds (ETFs) have had a difficult time providing the exact targeted exposure that ETFs normally deliver, but investors willing and brave enough to call the bottom in financials could benefit. It’s a risky thing to do, though.

Private equity firms have recently been investing billions in cash-strapped U.S. banks, but these deals have come at the expense of existing shareholders by diluting their shares, according to the Dow Jones Newswires. In some cases, shares have been diluted by as much as 70%.

Private equity ETFs are for investors who want to participate in private equity’s gains without having their money locked up, says Invesco. Only a handful of listed firms invest in private equity, with mixed strategies and results.

ETFs that could benefit from this shot in the arm:

• Select Sector SPDR Financial (XLF), down 7.9% year-to-date
• KBW Bank ETF (KBE), down 6.1% year-to-date
• PowerShares Listed Private Equity Portfolio (PSP), down 8.8% year-to-date
• PowerShares International Listed Private Equity Portfolio (PFP), down 7.6% year-to-date
• Opta S&P Listed Private Equity NR ETN (PPE), down 4.6% year-to-date

Tags: ETNs, Financial, Sector ETFs