I was recently thinking about investments that should be available to everyday investors. These investments make perfect sense and could attract billions of dollars into the marketplace. It actually surprises me that none of the large fund companies offer any of these investment products.
Here are 3 investments that fund companies should offer.
Regional Real Estate ETF’s
This was actually the suggestion of a commenter from when I first started Buy Like Buffett. Since real estate prices vary by region, why not come up with an ETF that lets you invest in property in a specific region? A fund company should come up with region specific exchange traded funds. I think that investors would flock to such a vehicle. Many investors would like to invest in Midwestern real estate and avoid Florida, California, and other large markets that are seeing huge price declines. A state specific ETF would be ideal but that may be too cumbersome for fund companies. A regional ETF would fit the bill nicely.
Hedge Funds For The Middle Class
Hedge Funds invest aggressively and can earn returns that most mutual fund managers dream about. These funds can respond rapidly to market conditions since hedge fund managers trade more frequently and can go long or short based on market conditions. The problem is that hedge funds are currently only available to accredited investors. Accredited investors are individuals with a high net worth or professionals that make a large sum of money. There are no investment alternatives available to middle class and upper middle class individuals. What if an upper income middle class individual would like to invest in a hedge fund? If an investor is willing to take the risk, they should have an opportunity to invest in such a fund.
Commercial Paper ETF
Wouldn’t it be great if short term investors had the opportunity to buy commercial paper? Companies love to access the commercial paper market because it is a cheap source of financing for companies. Investors like commercial paper because it pays out higher interest rates than savings accounts and money markets. It also allows investors to maintain their liquidity since the longest maturity for any commercial paper instrument is 270 days. A commercial paper ETF would be great for fixed income investors since only companies with investment grade credit ratings will qualify.
What type of investments would you like to see offered?
(Photo by: Rob Young)
