Additionally, Steinhilber says that because many of the companies held in the ETF are small and are micro-caps such as Capital Southwest ( CSWC), Gladstone Capital ( GLAD), Investment Capital ( TICC) and Hercules Technology Growth Capital ( HTGC), coupled with the general risks involved with private equity, "this security will be more volatile and have a higher risk profile than other ETFs," he said. "Anyone buying it should have that in mind and have an appropriate time horizon." Greg Newton, a freelance financial journalist who runs the Naked Shorts blog agrees: There are some "pretty questionable companies" held in the ETF, he says. "People have to be a lot more careful about taking a look under the hood." Other observers also have expressed concern that the private-equity ETF may not be exactly what it claims to be. "Part of the problem is a lot of the companies in this ETF basket aren't really private equity," says Carl Delfeld, president of ChartwellETFAdvisor.com, an ETF portfolio advisory service. A lot of them instead "lend money or do leveraged buyouts or service private-equity companies," he says. "So it's kind of an awkward fit." There are companies in there that are more lenders than private equity companies in the sense of buyouts and venture capital, says AgileInvesting.com's Steinhilber. "The name is a bit misleading." Some of the companies Steinhilber points to include Allied Capital ( ALD), which accounts for about 6.5% of the portfolio, American Capital Strategies ( ACAS), which makes up about 8.5% of the portfolio, and Capital Source ( CSE), which is 7% of the holdings. Those stocks are "very different from a lot of the other companies in the portfolio like early-stage pharmaceutical companies and owners of mutual fund companies," he says. "It's a real mixed bag, so I think investors really need to examine" what the ETF really is.