Investors are beginning to explore riskier market sectors with exchange traded funds in search of fatter profits, buying patterns suggest.
The first half of 2011 has given niche or alternative ETF asset classes a chance to shine, as sectors such as Asian local debt, managed futures and senior loans were some of the most popular, reports Jessica Toonkel for Investment News.
For instance, WisdomTree Asia Local Debt Fund (NYSEArca: ALD) has garnered $471 million since its March inception, according to IndexUniverse research. [New ETFs For Specific Areas of the Market.]
“The alternatives theme is really resonating with people right now, and managed futures was one of the few hedge fund strategies that not only held up but performed well during the market disruption,” said Scott Burns, an analyst at Morningstar Inc. According to analysts, the success of ALD is proof that investors are seeking non-correlated returns. [Smaller ETF Managers Gather More Assets.]
The Asia Local Debt ETF’s success also shows that investors are more willing to go outside of the U.S. for yield. [REIT ETFs: The Best of All Worlds.]
Other top selling new ETFs for 2011:
- PowerShares Senior Loan ETF (NYSEArca: BKLN)
- iShares Dividend Equity ETF (NYSEArca: HDV)
- Schwab US REIT ETF ( NYSEArca: SCHH)
WisdomTree Asia Local Debt Fund
Tisha Guerrero contributed to this article.