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Since 1993, when the first true ETF became available,and in 2006, when the first ETN became available, these investment vehicles have changed the face of investing. ETFs, and to some extent ETNs, began as a way to easily invest in broad markets, such as the S&P 500 and NASDAQ 100. But now, ETFs and ETNs are anything but exchange traded index funds. The explosive growth in ETFs and ETNs have made them dramatically narrower in scope, allowing investors access to hundreds of new markets, sectors, and strategies. Below, we profile 10 ETFs and ETNs that give investors access to exotic and previously inaccessible investment strategies.

  1. Elements Dogs of the Dow ETN (NYSEARCA:DOD): This ETN allows investors an easy way to pursue the "Dogs of the Dow" investing strategy, which was popularized by Michael Higgins in 1991. This strategy calls for investors to annually purchase the 10 highest yielding stocks in the Dow. Since this ETNs inception, it has outperformed both the Dow and the S&P 500, validating its investment strategy. The ETN carries an expense ratio of 0.75% and is backed by Deutsche Bank (NYSE:DB).

  2. Elements Global Warming ETN (NYSEARCA:GWO): This ETN allows investors to access an index of companies that are combating global warming. What makes this ETN appealing to us is that it allows investors to access this subsector, but not by being overweight the solar sector. While there are some companies we like, as a sector, solar should be avoided. This ETN has a much broader base of holdings, thus limiting the fallout from the carnage in the solar sector. Since inception, the fund has fallen just over 25%, compared with a drop of over 90% for the Claymore Solar ETF (NYSEARCA:TAN). This ETN has an expense ratio of 0.75% and is backed by Credit Suisse (NYSE:CS).

  3. First Trust US IPO Index Fund (NYSEARCA:FPX): This unique ETF allows investors access to newly public companies. Top holdings include Visa (NYSE:V), Phillip Morris (NYSE:PM), and General Motors (NYSE:GM). The fund holds its stocks for 1,000 trading days after they become public, after that replacing. The fund has a gross expense ratio of 0.98%, and a net expense ratio of 0.6%. The fund is predicated on the idea that newly public companies will outperform due to their innovativeness and ability to ride out economic storms. And the idea has worked. Since inception, the ETF has advanced over 19%, as the S&P 500 has dropped almost 4%.

  4. First Trust NASDAQ 100 Ex-Technology Sector Index Fund (NASDAQ:QQXT): The NASDAQ 100 is an index of the largest non-financial stocks on the NASDAQ. But the index is dominated by technology companies such as Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG). Investors looking to invest in the non-tech companies of the NASDAQ have little reason to invest in the PowerShares QQQ ETF Trust (NASDAQ:QQQ), since that ETF is dominated by tech companies. But this ETF has no technology components, and for investors who wish to access NASDAQ companies without technology getting in the way, this ETF is the way to go.

  5. IQ Merger Arbitrage ETF (NYSEARCA:MNA): Merger arbitrage is an interesting way to gain some alpha with little risk. An example of that is the pending deal between Gilead (NASDAQ:GILD) and Pharmasset (VRUS). Gilead has agreed to acquire Pharmasset for $137 per share. Yet Pharmasset currently trades at $128, even though all signs point that the merger will go through as planned. Investors can buy Pharmasset at $128 and make just over 7% when the deal closes, all with minimal risk. That is why Pharmasset is this ETFs top holding. Other holdings include Motorola Mobility (NYSE:MMI). While the fund's performance in the past year is nothing to write home about (down 49 basis points versus a 7 basis point rise in the S&P 500), merger arbitrage is inherently a less volatile investing technique then investing in the broader market.

  6. iPath Optimized Currency Carry ETN (NYSEARCA:ICI): The carry trade is a currency market strategy where investors borrow money in low yielding markets (such as Japan), and invest them in higher yielding currency markets. This ETN offers investors a way to access the currency carry trade involving the G10 currencies. Since inception, the ETN is largely flat, but offers investors a product that is far less correlated to the broader markets than most assets. This ETN has a correlattion of just 0.26, compared with correlations of over 0.8 for many stocks.

  7. Active Bear ETF (NYSEARCA:HDGE): For many investors, picking just one stock to short is a laborious process. Selecting a basket of stocks to short is even worse. But now, investors can let AdvisorShares do the work for them. This ETF is an actively managed ETF that shorts a select group of stocks. Top holdings include Citigroup (NYSE:C), Teradata (NYSE:TDC), and Fossil (NASDAQ:FOSL). The ETFs managers choose companies that they believe have fundamental weaknesses, as well as creative accounting management, under the assumption that in falling markets, such companies will fall the hardest. This ETF is largely a mirror image of the S&P 500, and since inception it has advanced by 88 basis points, as the S&P 500 fell 3.23%. We should caution investors that this ETF is best suited for markets in a downward trend. Otherwise, the fund's net expense ratio of 3.29% will quickly eat away your investment.

  8. Guggenheim Spin-Off ETF (NYSEARCA:CSD): This ETF invests in companies that have been spun off from another company within the past 30 to 6 months, under the belief that the spin-off took place to unlock the growth potential of the underlying companies. Top holdings include Ascent Capital (NASDAQ:ASCMA), Phillip Morris (PM), and Time Warner Cable (NYSE:TWC) Since inception, the fund has outperformed the S&P 500, falling 5.61% compared to the S&P 500's 9.96% drop.

  9. SPDR Barclays Capital Convertible Securities ETF (NYSEARCA:CWB): This ETF tracks a basket of convertible securities, which are an instrument that mix debt and equity together. Convertible securities are named this way because they are most commonly corporate debt that converts to a company's common stock at a fixed price. The ETF carries an expense ratio of 0.4% and pays investors a monthly dividend.

  10. EGShares Low Volatility Emerging Markets Dividend ETF (NYSEARCA:HILO): This ETF focuses on blending dividends, emerging markets, and low volatility together. It is often difficult to separate emerging markets and volatility, but this ETF manages to do so by focusing on telecommunications and utility companies, the traditional dividend payers in developed markets. The concept has worked, since this ETF has outperformed the benchmark emerging markets ETF, the iShares MSCI Emerging Markets Index Fund (NYSEARCA:EEM), by almost 6%. The fund has an expense ratio of 0.85%.

ETFs and ETNs have allowed investors to specialize their portfolios in ways never before thought possible. Any portfolio can now be customized to meet the needs of most investors. These 10 ETFs and ETNs are just a sampling of what is available for investors in the world of specialized ETFs. The first leg of growth in this industry was driven by index and sector ETFs. The next leg, however, will be driven by specialized products like these.

Source: 10 Exotic Investment Ideas You Can Play Through ETFs And ETNs

Additional disclosure: We are long VRUS, PM, and GOOG via a mutual fund. We are long GILD via FBT, an ETF that tracks a basket of biotech stocks.