1) Small-caps, over time, have outperformed the large-caps, and investors can get excellent exposure to them through ETFs.
2) The United States makes up one-third of the global market capitalization. So, why are domestic investors underallocated globally? ETFs give a variety of ways to get exposure to the booming global economy through regional funds, single-country, emerging markets and more recently, frontier markets.
3) Currency and commodities are asset classes that were once difficult to get exposure to. Now with ETFs and exchange traded notes (ETNs), coupled with the surge in commodity prices and the falling dollar, these types of funds deserve a portion of the buy-and-hold portfolio.