VanEck Alternative Asset Manager ETF

GPZ

Market cap $145M

I have had to learn many lessons the hard way. High-yield investing can be very rewarding but also equally punishing. Learn from my mistakes to save yourself a lot of money.

I recommend buying the VanEck Alternative Asset Manager ETF, which offers targeted exposure to leading private credit and alternative asset managers. GPZ currently trades at 14x forward earnings versus a historical average of 19x, implying a 35% upside if multiples revert. Liquidity mismatches, not widespread defaults, are driving recent stress; effective losses remain contained, and credit recoveries are near parity.

Dividend investors often rely on backward-looking metrics. But AI could disrupt many “safe” dividend businesses. The article explains why this risk is still widely overlooked.

AI is beginning to disrupt far more industries than most investors expected. As barriers to entry collapse, many businesses could face lower growth and valuations. But one asset class may actually benefit from this shift.

“Safe” 10% yields often lead to disappointing long-term results. Data shows the highest-yielding stocks frequently underperform. A better middle ground may offer stronger returns.

This Major Market Rotation Just Handed Dividend Investors A Huge Gift

Dividend stocks and defensive sectors have dramatically outperformed as investors flee AI-vulnerable and AI-spending industries, but valuations now appear stretched. Consumer staples and energy sectors trade at historically high forward P/E multiples, often exceeding the S&P 500, despite lower long-term earnings growth prospects. Materials and industrials have also become extended, with valuations reflecting significant future earnings already priced in, especially given AI infrastructure spending.

VanEck Alternative Asset Manager ETF offers exposure to leading alternative asset managers, capitalizing on robust AUM growth trends in private credit and equity. The recent GPZ selloff appears overdone, as AI disruption fears lack hard evidence and AI itself presents significant new investment opportunities for AAMs. GPZ's portfolio is anchored by industry giants like Brookfield and Blackstone, all boasting double-digit earnings and dividend growth outlooks.

Private markets were historically for institutional and ultra-high-net-worth investors. Today, that exclusivity is breaking down, as many retail investors realize the value behind private markets and advisors look for additional diversification tools.

Launched earlier this year to considerable fanfare, the SPDR SSGA IG Public & Private Credit ETF (PRIV) was designed to democratize access to the private credit markets — a massive $3 trillion sector once exclusive to institutional players and high-net-worth individuals.