Bottom Line: Many of the foreign equity ETFs have a bias towards the energy and financials sector, which can have an unfavorable impact on overall returns.

69. Your ETF May Be State-Owned

There are some other interesting biases that often pop up in international equity ETFs, including a tendency of these products to maintain significant weights towards companies in which the local government holds a significant stake. In both developed and emerging markets ETFs (including those focused on U.S. stocks), it is not uncommon to see significant allocations to companies that are controlled by the state.

The presence of state-owned companies isn't necessarily a bad thing, but it can be cause for concern. When the government is calling the shots, there is a significantly higher likelihood of taking actions that are not in the best interest of shareholders (e.g., selling off oil reserves, capping prices, etc.). Unfortunately, there's no easy way to identify these securities or the allocation that various ETFs effectively make to state-owned ETFs; as a rule of thumb, weightings tend to be higher in ETFs that focus on large cap and mega cap stocks. Unfortunately, it requires a bit of old-fashioned research if you're interested in seeing the allocation in an ETF you hold.

Bottom Line:  A number of developed and emerging markets ETFs have major allocations to companies that are controlled by the government.

70. Preferred Stock ETFs: Juicy Yields In An Often Overlooked Location

Most investors have little or nothing in the way of an allocation to preferred stock in their portfolios. For those looking to enhance the current returns derived without taking on a significant amount of risk, this "hybrid" asset class might be worth a deeper dive. Preferred stock functions more like traditional debt in the sense that it delivers a steady distribution to shareholders that is superior to common dividends. It's generally possible to get distribution yields in excess of 5% from preferred stocks, which fits these securities somewhere between high quality corporates and junk bonds on the risk spectrum.

There are a number of preferred stock ETFs out there, including a couple that focus on securities from issuers outside the United States; CNPF focuses on Canadian securities, while IPFF casts a slightly wider net.

Bottom Line: Preferred stock ETFs can offer an attractive risk/return profile along with a current income similar to a bond.