3) Market Vectors - Gulf States (NYSEArca: MES)

We've seen two ETFs launch in the past year focused on the Middle East & Africa: the PowerShares MENA ETF (NASDAQGM: PMNA) and the Market Vectors Gulf States Index (NYSEArca: MES). Both launched in July 2008, so they haven't had much time to gather assets: As of 8/27, PMNA had $31 million and MES had just $4 million.

I chose to focus on MES because of its smaller asset count and also because of its pure-play focus on the Middle East. At a time when the correlation between U.S. and international stocks is narrowing quickly, the Middle East offers a solid opportunity for diversification. If you think high oil prices are hurting the global economy, for instance, you've got to imagine that they're helping the Middle East.

Don't just take my word for it, either: For the year ending July 31, 2008, the index for MES was up 21.8%, while the S&P 500 was down 11.1%. Now that's diversification.

4) Claymore/Alpha China SmallCap (AMEX: HAO): Speaking of diversification, is anyone else surprised that the Claymore/AlphaShares China Small Cap Index ETF (AMEX: HAO) has attracted so few assets? As of July 31, it had just $9.8 million in assets according to Morningstar, although that's since jumped to $21 million as of August 27 (perhaps a post-Olympics boom?).

The case for this ETF seems clear. China is growing fast. The big, state-owned companies like PetroChina and the Bank of China are pseudo-government entities that don't reflect the innovation in that society. If you really believe in a rising China with a rising, creative middle class, you've got to believe in the entrepreneurial power of the Chinese citizens. Investing in small-caps gives you access to this power, and HAO is the only way to do it.

I know, I know—the fund has gone nowhere but down since launching in late-2007, and is off more than 25% this year. But still, it strikes me as an interesting idea.

5) NYSE Arca Tech 100 (NYSEArca: NXT): This is one of my favorite stories because it shows just how odd the market can be. The Nasdaq-100 is a very odd index. It holds only stocks listed on the Nasdaq; it has a top-heavy weighting system that, right now, puts a 13.5% allocation toward Apple; and it's widely regarded as a "tech" index despite the fact that only 65% of the index is invested in Technology.

The NYSE Arca Tech 100, by contrast, makes a great deal more sense while being structured in a similar way to the Nasdaq-100. The NYSE Arca Tech 100 tracks companies listed on all three U.S. exchanges, rather than artificially restricting itself to one; it puts a 5% maximum cap on weighting any component, to keep from being top-heavy (although it unfortunately uses a price-weighting mechanism, as opposed to a market-cap-weighting approach); and it is, as the name suggests, an index of 100 leading technology companies, with none of the Financial or other exposure that clogs up the Nasdaq-100.

And yet, NXT has $7 million in assets and PowerShares Nasdaq-100 ETF (NASDAQGM: QQQQ) ETF has $17 billion. Go figure.

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