Niche

The last category in the ETF world -- which in my opinion, is still wide open and probably the most exciting -- is the niche world. Interestingly, I don’t think the players involved in this category either realize they're involved, understand it's a segment of the market, or truly recognize its potential. Maybe I'm wrong here, but if I they did, I'd expect it would no longer be a question of who rules this category, as they'd already have it locked up and would be telling us just that through their branding and marketing.

The niche market brings the ETF world back to what it was originally designed to do, in that it allows holders to remain diversified while maintaining the flexibility to move in and out whenever they choose. As a money manager that's segmented a part of my business solely to this area, I can find an ETF to satisfy my desire in almost every area.

But the real key niche markets that will be paramount to my future success are still going untracked and offer tremendous opportunity to the company who decides to pick up the ball and run with it. There may be more players in this game that I don’t give credit to, but from my vantage point, I see 2 competing for the greatest market share: Claymore Advisors and Market Vectors.

Claymore has a vast line up of ETFs but is probably not a name known by many traders out there. The trader will, however, recognize what I believe to be Claymore’s niche gems: their Solar ETF (TAN), their recently launched Airline ETF (FAA), and their global-shipping ETF (SEA). The company seems to be on the right track in understanding what traders want and marketing the ETFs correctly through such tactics as creating easy-to-remember symbols. Unfortunately, the rest of their lineup will never make it into any of my portfolios, nor will they be discussed at cocktail parties. However if Claymore can understand the market that's available to them, they’ll quickly take over.

Market Vectors possesses a few excellent ETFs, such as their Gold Miners ETF (GDX), their Coal ETF (KOL) or their Agribusiness ETF (MOO). Much like Claymore, they seem to understand the key to solidifying within traders minds what their ETF stands for and does, however it's still yet to be determined if they take this to the next level.

It's clear that there's a tremendous bull market going on here, but one that unfortunately, we as traders cannot truly profit from other than knowing all our available trading options and bringing them into our game. At some point, maybe these companies will sell shares to the public, at which time you’ll clearly know who will be leadership. From my vantage point, it’s not just important to understand what’s happening in this world, but also who’s making it happen.