BOSTON (TheStreet) -- There was the StockCar Stocks Index Fund
The multiplying array of exchange traded funds and mutual funds are increasingly presenting investors with the challenge of separating novelty, or "flavor of the month" funds, from broad-based vehicles that consistently make money year after year.
According to the Investment Company Institute, 149 ETFs were launched in 2008 and 50 closed shop. There were 797 ETFs by the end of 2009, when 120 entered the marketplace and 49 left. In 2008, 704 mutual funds were created, compared with 321 that closed. In 2009, launches were outnumbered by closures, 457 to 488, and 336 funds merged with others.The StockCar Stocks Index Fund presents a good example of the limits of niche funds. Numerous companies dropped out of NASCAR and, in turn, were dropped from the fund, hurt by the economic recession. Ever-changing holdings, however, weren't the only cause of the fund's demise. Over the years, its assets rarely topped $6 million.
Nevertheless, uniquely narrow funds are still doing their best to lure assets.
There are ETFs dedicated to specific states, with the Oklahoma Exchange-Traded Fund (Stock Quote: OOK)
The Vice Fund (Stock Quote: VICEX)