Stockpickr: Profit From ETFs' New Bag of Tracks

Using the new wave of exchange-traded funds as a starting point for your research, I believe it's possible to pick stocks that will outperform the market.

The first part of this wave was to simply create low-fee funds that bought every stock in an index, allowing investors to mimic the returns of that index. The Spyder Trust(SPY Quote) and the Nasdaq 100 Trust(QQQQ Quote) are great examples.

The second part of this wave took things one step further and developed ETFs that mimicked the behavior of sectors. Semiconductor HOLDRs(SMH Quote) is an example in the semiconductor sector.

But it's the final part of this ETF wave that excites me. Taking research that demonstrates how certain fundamental considerations could lead to outperformance and then selecting stocks that meet those criteria is a very interesting technique. Although I would not invest in these ETFs, I would certainly research the holdings of each one and invest in a blend.

We set up the most creative ETFs in Stockpickr so that you can easily peruse their top holdings and see at a glance which hedge funds, mutual funds and other investors own each position. It's interesting to see which recommendations are generated by creating a portfolio that's a blend of the stocks in the different ETFs.

Here are several ETFs I believe are worth watching: