While the ETF industry is sometimes scrutinized for packaging niche investments into a retail wrapper, ETFs have historically been one of the key ways to democratize access to legitimate “hard-to-reach” investment strategies. The ETF wrapper has made many of these exposures more convenient to buy and easier to incorporate into portfolios. And for many retail investors, the barrier is removed for certain investments that have been historically targeted at institutional investors. This note provides an overview of some of the most significant alternatives (and some of the new, more obscure, yet in-demand alternatives) that have successfully been placed an ETF wrapper.
What exactly are alternatives?
The CAIA Association (Chartered Alternative Investment Analyst) has several resources behind the basics of alternatives (see this link for a good one). In its most simple form, an alternative investment is anything outside traditional investments like public equities, public fixed income, or cash. More specifically, it includes areas like real assets, hedge funds, private equity and private credit, and structured products. A key characteristic of an alternative investment is that it primarily has low correlation with traditional investments, so retail investors often use alternatives in a small segment of their portfolio to balance out equity and bond risk (although for some institutional investors, that percentage can be as much as 40%). The alternative market is expected to grow significantly with data from Prequin citing the alternatives industry at potentially $32 trillion by 2030 due to growth in areas like private capital and infrastructure, among others. And as it expands, more strategies will likely become available to retail investors through ETFs.
While real assets like commodities and natural resources are now widely accepted in an ETF wrapper, some more niche alternative investments have also seen recent success. Here’s an overview of some alternative investments in ETFs—including both old and new strategies.
1. Gold
Putting gold in an ETF is arguably one of the biggest innovations in the ETF space, and also one of the clearest examples of an ETF wrapper making a relatively difficult-to-hold alternative a household name. Gold has long been used as a diversifier, inflation hedge, and store-of-value asset, but direct ownership isn’t practical because it involves storage space and insurance.
State Street launched the SPDR Gold Shares (GLD ) in 2004, backed by physical gold held in a vault. GLD gave investors a way to access gold through a brokerage account rather than through futures, gold mining equities, or holding physical gold themselves. GLD has $152 billion in assets and sits as 10th largest among over 5,000 ETFs.
2. Bitcoin
Spot bitcoin ETFs arrived with plenty of controversy, but they also solved a real access problem. Before these funds launched, investors who wanted bitcoin exposure often had to open an account at a crypto exchange or manage private keys. The iShares Bitcoin Trust (IBIT ) and its peers simplified that process by offering bitcoin exposure in a brokerage account and a familiar ETF format. Like gold ETFs, bitcoin ETFs are backed by bitcoin held in custody.
Despite significant outflows over the past few months, IBIT remains one of the largest U.S. ETFs by assets (in the top 1% of largest ETFs) with over $50 billion in assets. Also notably, spot bitcoin ETFs proved that the ETF wrapper could extend beyond traditional commodities and into digital assets. Currently there are several other types of spot crypto ETFs including Ethereum, Solana, Chainlink, XRP, and more.
3. Autocallable income
There are more obscure assets that have had success in the ETF wrapper—including autocallables. Calamos launched the first autocallable ETF, the Calamos Autocallable Income ETF (CAIE ) in June 2025. The fund is designed to provide high monthly income and reduced downside risk through exposure to a laddered portfolio of autocallables. In simple terms, autocallables are structured products tied to the performance of an underlying index or asset, often with contingent coupon payments and early redemption features. Historically, these products were more commonly used by institutional investors, so they are a strong example of the ETF wrapper moving into areas of alternatives that would have been difficult for most retail investors to access.
The space has been well-received and grown to about $1 billion in assets. Calamos now also offers the Calamos Nasdaq Autocallable Income ETF (CAIQ), while the category has also broadened with launches from firms including TrueShares, REX, GraniteShares, and others.
4. Volatility
Volatility ETFs are another example of the wrapper bringing a difficult and specialized exposure into public markets. Volatility ETF are tied to VIX futures, VIX-linked indexes, or strategies that can monetize the volatility risk premium through options and futures positioning. These ETFs are typically meant to be held for a day (similar to leveraged ETFs).
Launched in 2011, ProShares’ VIX Short-Term Futures ETF (VIXY ) seeks to profit from increased volatility of the S&P 500 (which reduces U.S. equity risk) by providing exposure to the S&P 500 VIX Short-Term Futures Index. ProShares offers other products like the Short VIX Short-Term Futures ETF (SVXY ), which tracks -0.5x performance the same index as VIXY and profits from decreases in the expected volatility of the S&P 500. These are not benchmarked to the widely referenced Cboe Volatility Index, but VIX futures contracts which can perform differently. The category has grown to over $2.5 billion in assets.
5. Catastrophe bonds
The Brookmont Catastrophic Bond ETF (ILS ), launched in April 2025, is the first catastrophe bond ETF. The fund provides exposure to catastrophe bonds, which are financial instruments that price and transfer natural disaster risk (e.g., hurricanes, typhoons, earthquakes, and wildfires) from insurers to capital markets. Catastrophe bonds have historically shown very low correlation to traditional equities, bonds, and commodities because their returns are driven primarily by insured event risk rather than macroeconomic cycles. They are also known for potentially better yields than other high-yielding bonds.
Catastrophe bonds have existed for years as a niche institutional market, but ILS offers daily liquidity in a familiar wrapper. ILS also helps diversify across events and locations to potentially reduce risk relative to holding the underlying assets directly. For more on considerations to retail investors, see this article on the ILS ETF website.
Bottom Line:
ETFs have been able to provide access to many institutional alternative strategies in retail-friendly funds. Early movers are now well-accepted investments like commodities and other real assets, which later extended to more obscure areas like digital assets, autocallable income, catastrophe bonds, and more.
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