Best Alternatives ETFs to Invest in for 2025

The First Trust Long/Short Equity ETF (FTLS) is an actively managed exchange-traded fund that seeks to provide long-term capital appreciation by investing in a diversified portfolio of U.S. equity securities while employing a long/short strategy. FTLS aims to capitalize on both upward and downward price movements in the market by taking long positions in stocks expected to appreciate and short positions in those expected to decline. The fund's managers utilize a combination of fundamental and quantitative analysis to identify investment opportunities and manage risk. FTLS provides investors with a way to potentially benefit from market inefficiencies while mitigating some of the volatility associated with traditional long-only equity investments.

The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed ETF that seeks to provide long-term capital appreciation by investing in a diversified portfolio of futures contracts across multiple asset classes, including commodities, currencies, interest rates, and equity indices. The fund aims to capitalize on trends in these markets while managing risk through a systematic, rules-based approach. DBMF is designed to offer investors exposure to managed futures strategies, which have historically exhibited low correlation to traditional stock and bond markets, potentially enhancing portfolio diversification. The fund's sub-adviser, Dynamic Beta Investments, employs a proprietary methodology to replicate the performance of leading managed futures hedge funds, offering a more accessible and cost-effective way to gain exposure to this alternative investment strategy.

The Simplify Managed Futures Strategy ETF (CTA) is designed to provide investors with exposure to managed futures strategies, which aim to capitalize on trends in commodity, currency, and financial futures markets. The fund seeks to achieve its objective by investing in a diversified portfolio of futures contracts across various asset classes, including equities, fixed income, commodities, and currencies. Managed futures strategies are often used as a hedge against market volatility and inflation, making CTA an attractive option for investors looking to diversify their portfolios beyond traditional asset classes. The fund is actively managed, leveraging quantitative models and systematic approaches to identify and exploit market trends.

The IQ Hedge Multi-Strategy Tracker ETF (QAI) is designed to provide investors with a diversified hedge fund-like exposure by tracking the IQ Hedge Multi-Strategy Index. This ETF employs a multi-strategy approach, combining various hedge fund strategies such as long/short equity, global macro, market neutral, and others to achieve risk-adjusted returns. QAI aims to deliver consistent performance with lower volatility compared to traditional equity investments. The fund is suitable for investors seeking alternative investment exposure while maintaining liquidity and transparency inherent in ETFs.

The RLY ETF (RLY) is an actively managed exchange-traded fund that seeks to provide investors with diversified exposure to alternative asset classes, including cryptocurrencies, commodities, and other non-traditional investments. The fund aims to capitalize on emerging trends in the digital asset space while mitigating risks through a multi-asset approach. Managed by a team with expertise in both traditional and alternative investments, RLY offers a unique way to gain exposure to innovative financial instruments without the complexity of direct ownership. The fund's strategy combines tactical asset allocation with rigorous risk management, making it suitable for investors looking to diversify beyond conventional stocks and bonds.

The AGFiQ U.S. Market Neutral Anti-Beta ETF (BTAL) is an actively managed fund that seeks long-term capital appreciation by exploiting the low-beta anomaly. The fund employs a market-neutral strategy, taking long positions in low-beta U.S. stocks and short positions in high-beta U.S. stocks within the same industry. This approach aims to generate positive returns regardless of overall market direction by capitalizing on the tendency of low-beta stocks to outperform high-beta stocks over time. BTAL provides investors with a tool to hedge against market volatility and diversify traditional equity exposure.

The Franklin FTSE Saudi Arabia ETF (FLSP) provides investors with exposure to Saudi Arabian equities by tracking the FTSE Saudi Arabia Index. This ETF offers a way to invest in one of the largest and most dynamic economies in the Middle East, with a focus on sectors such as financials, materials, and energy. The fund is designed to capture the growth potential of Saudi Arabia's market, which has been undergoing significant economic reforms as part of the Vision 2030 initiative. FLSP is suitable for investors seeking diversified exposure to Saudi Arabian companies, including large-cap and mid-cap stocks.

The IQ Merger Arbitrage ETF (MNA) seeks to provide investment results that correspond generally to the price and yield performance of the IQ Merger Arbitrage Index. This ETF employs a merger arbitrage strategy, which involves investing in companies that are the subject of announced mergers, acquisitions, or other corporate reorganizations. The fund aims to capitalize on the price discrepancies between the current market price of a target company's stock and the proposed acquisition price. MNA is designed for investors seeking exposure to event-driven strategies with lower volatility compared to traditional equity investments. The fund typically holds a diversified portfolio of global merger arbitrage opportunities, providing investors with a unique way to gain returns from corporate deal activity.

The KraneShares Bloomberg Commodity Strategy Managed Futures ETF (KMLM) is an actively managed exchange-traded fund that seeks to provide long-term capital appreciation by investing in a diversified portfolio of commodity futures contracts. The fund employs a systematic, rules-based approach to identify trends in commodity markets and adjust its exposure accordingly. KMLM aims to capitalize on both upward and downward price movements across a broad range of commodities, including energy, metals, agriculture, and livestock. The fund's strategy is designed to offer investors a liquid and transparent way to gain exposure to managed futures, which have historically exhibited low correlation to traditional stock and bond markets.

The ClearBridge Select ETF (CLSE) is an actively managed exchange-traded fund that seeks long-term capital appreciation by investing primarily in U.S. equity securities. The fund focuses on companies that the portfolio managers believe have sustainable competitive advantages, strong management teams, and attractive growth prospects. CLSE typically holds a concentrated portfolio of 30-50 stocks, with a preference for mid- to large-cap companies across various sectors. The fund's active management approach allows for flexibility in responding to market conditions and identifying opportunities that may be overlooked by passive strategies.