Under The Hood: PowerShares Private Equity ETF

Ever wonder what it's like to be an investor in a private equity fund? You're not alone. Private equity investing is the country club of the investment world: Highly sought after, but off limits to all but a select few. If you find yourself with a burning desire to be part of the private equity club, but know that Bain and the Carlyle Group won't be calling you up anytime soon for your investment dollars, don't fret. The PowerShares Listed Private Equity ETF PSP can you get the private equity access you desire. Obviously, PSP is heavily weighted to financials, but the allocation to that sector in percentage terms may come as a surprise. Financials such as Blackrock BLKand Leucadia National LUK account for less than 84% of PSP's weight. Industrials get a 9% weight and consumer staples sneak in with almost 3%. PSP tracks the Global Listed Private Equity Index and currently holds 60 stocks. The expense ratio is 0.6%. Other familiar names among PSP's holdings include Apollo Investment AINV and Fortress FIG. PSP actually represents a decent option for investors that are feeling a little pensive about financials. After all, PSP isn't going to get you involved with more controversial names in the sector and the ETF has outperformed the Financial Select Sector SPDR XLF by a fair margin over the past three months. When it comes time to get involved with financials, PSP may not get the press, but it is worth a look. A yield of around 4% doesn't hurt either. Beat the market consistently by receiving real-time trade alerts from the ETF Professor!