Will 2025 Be The Year Of ETFs And Alternative Investments?

The Juice spent much of the last quarter of 2024 discussing all types of alternative investments. Today, we use some of what we did last year to set the scene for 2025. A year that will go down as the year of the ETF and the alt. 

But first, a story to provide necessary context. 

Just before the New Year — don’t judge us! — The Juice was watching some trashy reality TV. In full disclosure, it was 90 Day Fiancé. Again, don’t judge us!

One of the show’s participants mentioned, almost in passing when asked what he does for a living, that he’s in the process of creating an ETF. When met with a blank stare, he spelled it out — it’s an exchange traded fund — which he explained — paraphrasing — is basically a hedge fund, but it trades on the stock market. 

Okay. Fine. Whatever. Good luck with all that.

But the idea that this guy said, I’m creating an ETF, reminds us of the days of not being able to get through a conversation without somebody telling you about the app they’re developing. Thankfully, those days are largely gone. 

Next came the big coin or meme stock every claimed to be getting rich off of. 

Now, we guess it’s ETFs, or exchange… traded… funds. 

So I need some investors for this ETF I’m creating. It’s going to be huge!

Like social media and the larger internet, to find what’s actually worth your time, you have to wade through a ton of garbage. Which is to say, there’s lots that’s good about the explosion of options we’re seeing in the ETF and alt investing spaces. However, please proceed with caution. 

Because, while it’s not as easy to create an ETF as it is to post a YouTube video, it’s easy enough for enough people who have no idea what they’re doing. 

This is where The Juice comes in.

In 2024, we spent a lot of time separating the wheat from the chaff in the ETF space. We have also studied alts hard — both alternative ETFs and alt opportunities that don’t trade on the public markets. 

We’ll get into the latter another day as we discuss how to work emerging alts into your traditional portfolio, but today a few key themes to take from our work in 2024 on ETFs as we use them to help create the core of a solid long-term portfolio. 

Four of our ETF installments from late 2024 tie together much of what you need to know to effectively use a broad range of goal-appropriate and goal-specific ETFs to build a foundation that can carry you for the long haul and make space for speculation. 

As 2025 marches on — like starting this coming Monday — The Juice will give you actual ETFs we think you should buy (one by one) so you end up with a portfolio you can both set and forget and play around with every once in a while. How often only depends on how big an investing geek you are. 

We’ll have something for most everyone. 

Now the themes—

They’re alts because they give you the chance to execute strategies you likely could not execute on your own. The type of stuff once only available to the big money. However, as we’ll explain, they’re not all suited for your portfolio.

From What Are Alternative ETFs?

The key takeaway here is that just because an ETF says it does something or says it can do something doesn’t mean it’s right for you. Absolutely, an alternative ETF does something (beyond investing in the whole of a broad market) you can’t do yourself. As in, it screens an index for companies that meet certain criteria then assembles them strategically with appropriate weights. That could be something relatively complicated, such as screening based on cash flow metrics the way the Pacer US Small Cap Cash Cows 100 ETF (CALF) does. Or something more straightforward, yet precise, such as… 

…an ETF that iShares released just over a month ago. The iShares Top 20 U.S. Stocks ETF (TOPT) is brand spanking new. And, as its name makes clear, the ETF owns the broad stock market’s 20 biggest names.

From The Ultimate Alternative ETF To Buy Now

As an example, you have SPY and QQQ in your portfolio and you add to those positions regularly, which likely makes you overexposed to the world’s biggest companies, particularly American tech stocks. Maybe you want more exposure to these leaders. 

Better than buying a share of Tesla (TSLA), a share of Amazon.com (AMZN) and a share of Apple (AAPL) here and there with that extra grand you have laying around, you buy TOPT to increase that exposure across the 20 biggest names. You don’t care about concentration risk. You believe in the engines of the US economy. 

On the other end of the spectrum — to even out your exposure — look to RSP, an equal-weight ETF that owns the name of the S&P 500…

…in equal proportion. Not based on market cap. So, in SPY, for example, names at the bottom of the list, such as Alaska Air Group (ALK), Hasbro (HAS) and Boston Properties (BXP) have as much of a relative impact on performance as Apple or Microsoft.

From 3 ETF Investing Strategies You Can Use Right Now

Maybe you do care about concentration risk, but you also believe in the larger economy. But, like most of us, you don’t have the time and resources to buy all the S&P 500 components in equal allocations. There’s an ETF — RSP — that can do it for you. A great way to supplement and even out your portfolio core without going too heavy on the market cap leaders. 

When you look at FINX’s top holdings, you find PayPal (PYPL), Fiserv (FI) and Fidelity National Information Services (FIS) as the top three holdings, accounting for nearly 20% of the fund. Not necessarily the first three names you think of when you think of space with a fancy name.

From 3 Ways ETFs Can Make You A Better Investor Even If You Never Buy Them

FINX is a pure FinTech ETF. There’s a link to our review of it in today’s Freshly Squeezed section. You look inside FINX and see that PYPL, FI and FIS make up 20% of the holdings. Sure, FINX does something you can’t do on your own — properly allocate across the entire Fintech universe — but do you really want that anyway? Maybe the top three names — big, longstanding leaders in the space — are all you need. So you can ditch the ETF and buy them individually or get at them through more broad market ETF buys. 

The Bottom Line: Four themes that, when taken together, we hope help you make sense of the ETF world and how to access and use it most effectively. As we build our portfolios — for all types of investors — we’ll use more actual examples and examples of strategies to illustrate the best ETFs to go with and when it makes more sense to just stay away. 

The Juice believes that 2025 is the year of the ETF and the alternative investment. There’s already a ton of money flowing in both spaces. We’ll help you take the resources you have, align them with your goals and put your cash to work in the best places possible.

• A Fancy FinTech ETF
• Dive into Expert Picks – We Spill the Best Daily!
• The #1 Thing You Need To Know Before You Buy An ETF
• Check Out The Juice’s Favorite ETF Screen