7 ETFs for a Lower Return Outlook

Moreover, BlackRock projects private equity will be among the best performing assets over the next five years.

For private equity exposure, investors can consider the PowerShares Global Listed Private Equity Portfolio (NYSEArca: PSP) and ProShares Global listed Private Equity ETF (BATS: PEX).

PSP tracks the Red Rocks Global Listed Private Equity Index, which is comprised of 40 to 75 private equity companies, including business development companies, master limited partnerships and other vehicles that invest in, lend capital to or provide services to privately held companies.

PEX tries to reflect the performance of the LPX Listed Direct Private Equity Index, which consists of 30 global private equity companies. The component holdings will have a majority of its assets invested in or exposed to private companies.

Related: Why It Is A Good Time To Consider International ETFs

Private-equity firms are known for raising cash and borrowing money to acquire a company in an attempt to turn around and re-sell them later for a handsome profit.

On the other hand, the BlackRock team warned that U.S. Treasuries could be among the worst performing assets over the next five years, with Turnill projecting U.S. government debt to decline about 1% each year as bond yields rise from the current historic lows. The broad fixed-income space will also be in for some rough times as we head toward a rising rate environment.

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