Niche ETFs focus on specific industries. The lack of liquidity, higher expenses, and even the odd ticker symbols should hint that these investments are tricky.

Some investors prefer Nieche ETFs because it allows them to make a "more precise bet based on the specific product they have in mind" even though the returns are not necessarily higher, said K.C. Ma, a CFA and director of the Roland George investments program at Stetson University in Deland, Fla.

"The 'smart-product beta' design of these funds does not automatically guarantee a better risk and reward payoff," he said.

These special-purpose funds invest in a group of stocks with similar products and compared with the typical industry or sector ETFs, these ETFs are designed to target a more specific mapping of investors' preferences in terms of the exposure, Ma said.

"The icing on the cake is that the 'cool' names they are usually being called may provide additional returns due to the easy association in investors' minds," he said. "Many studies have shown that the more memorable investments often pay a premium to investors."

One of these ETFs is DIRT, iPath Pure Beta Agriculture, which has declined by 5.98% year-to-date and 803% over the past year. The IPath Pure Beta Agriculture ETN is an exchange-traded note that is based on the performance of the underlying index, the Barclays Capital Commodity Index Agriculture Pure Beta TR Index.

FOIL, iPath Pure Beta Aluminum, has risen by 21.58% year to date and 18.92% over the past year and is based on the performance of the underlying index, the Barclays Capital Aluminum Pure Beta TR Index.

Another ETF with a quirky name is (BLNG) , iPath Pure Beta Precious Metals, with a year-to-date increase of 8.05% and 5.57% over the past year. It's based on the performance of the underlying index, the Barclays Capital Commodity Index Precious Metals Pure Beta TR Index.

(WSKY) , Spirited Funds and ETFMG Whiskey & Spirits ETF is up by 28.4% through October and was launched on Oct. 12, 2016. This ETF invests across a wide variety of industries that are involved in the manufacturing and sales of bourbon and whiskey.

The problem with this ETF is that it has only $6.3 million under management and does average daily trading volume of just 3,000 shares per day, said Charles Sizemore, a portfolio manager for Interactive Brokers Asset Management, an online investing company based in Boston.

The problem arises when investors want to sell out of their position without taking a large loss.

"With a fund that size, it's virtually impossible to get in or out quickly without taking a haircut," he said. "Why deal with that headache and the extra 0.6% management fee when you can just buy up a basket of the underlying holdings? Most of the largest positions have U.S. traded ADRs that are vastly more liquid."

The lack of volume is troublesome and exists for many other targeted ETFs such as NASH LocalShares Nashville Area ETF, said Sizemore.

"How much demand is there, really, for NASH?" he said. "How many investors look up at their screen and say to themselves, 'Yes, this is what my portfolio has been lacking -- direct access to companies with offices in Nashville, Tennessee!' Not surprisingly, the fund does average volume of about 300 shares per day."

While (OLD) - Get Report , the Long-Term Care ETF and Obesity ETF (SLIM) - Get Report both focus on long-term, investable trends as longevity increases in the U.S., this ETF has the same issues as the other niche ones.

"Why on earth would you saddle yourself with an illiquid ETF and pay an additional half of a percent in fees if you could just buy and hold the underlying holdings, nearly all of which are liquid, publicly-traded REITs and health care companies?" Sizemore said.

ETFs that cover broad markets or indexes are a boon to an investor's portfolio and became "incredibly valuable" when they made formerly illiquid segments of the market liquid and accessible to the investing masses, he said.

These specialty niche ETFs may allow an investor to take part in a very specific segment of the market, but the risks do not outweigh the potential rewards.

"They do precisely the opposite -- they take liquid stocks and put them in an expensive and illiquid wrapper," Sizemore said. "Before you buy any ETF, ask yourself the following question: Does this product really fill a void I needed filled or is it just another 'me too' speculative gimmick?"

While speculating on a trendy investment theme is not always a poor choice, investors are "almost always better off buying a basket of individual stocks rather than a small, low-volume ETF, he said.

Investors should steer clear of these ultra-specific ETFs, specifically any inverse or short ETF, such as (GAMR) - Get Report  -- ETFMG Video Game Tech ETF, (BJK) - Get Report -- VanEck Vectors Gaming ETF (major gambling companies), (XIV)  -- VelocityShares Daily Inverse VIX short-term ETN (an inverse ETF; note that XIV is VIX spelled backward), (HAHA) -- CSOP China CSI 300 A-H Dynamic ETF, (CROC) - Get Report  -- ProShares UltraShort Australian Dollar and (GLTR) - Get Report  -- ETFS Physical Precious Metal Basket Shares, said Robert Johnson, president of The American College of Financial Services in Bryn Mawr, Pa.

"Those ETFs should only be used by speculators, not long-term investors," he said. "For instance, just because one is a video gamer, it does not mean that one should commit funds to the GAMR ETF. Investors would be wise to select ETFs that strategically expose them to specific broad sectors of the market that are difficult to replicate on his or her own, like a small-cap value ETF or a mid-cap growth ETF."

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