With over 1000 exchange-traded funds already being traded, and with 800 more currently in the registration process, the word "overkill" comes to mind - how many ETFs can we really use? In fact, some of the last few hundred to be introduced were borderline laughable because of their niche focus, including a fund hyper-focused on livestock and an exchange-traded fund that exclusively owned companies engaged in the creation of steel.

As it turns out, a few of these ETFs are having the last laugh. Their bizarre focus has turned out to be fruitful after all. Here's a look at three of these strange exchange-traded funds every investor should consider, and why.

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Down On the Farm
The iPath Dow Jones-UBS Livestock Subindex Total Return ETN (NYSE:COW) did not get off to a great start when it was unveiled in late 2007. The fund, which aims to mirror the price of hogs and cattle, sank from a price of $49 then to a low near $26 in late 2009. Since then though, COW has gained a respectable 23%.

Why do investors need the iPath Dow Jones-UBS Livestock Subindex Total Return ETF? Cattle prices are at all time highs, and not likely to ease anytime soon. As of this year, herds are as small as they've been in 53 years.

Not Just for Tree-Huggers Anymore
It wasn't all that long ago that green-friendly energy production was a great idea, but not fiscally fruitful. That's why the PowerShares WilderHill Clean Energy Fund (NYSE:PBW) and the more focused solar power play Guggenheim Solar Fund (NYSE:TAN) struggled. In fact, the big 70% plunge TAN suffered right out of the gate following its mid-2008 debut likely had everyone wondering if the ETF would even survive.

Not only has it survived, it's starting to thrive. Though the Guggenheim Solar Fund is only up 79% since its early 2009 lows, we're starting to see higher highs and higher lows again. The PowerShares WilderHill Clean Energy ETF has fared about the same, and is on the verge of punching through a key resistance level around $11.42.

Why do investors need the PowerShares WilderHill Clean Energy Fund and the Guggenheim Solar ETF? The average P/E ratio for the holdings in the solar fund is 13.6, which wasn't trumped up by heavy subsidies. The average P/E for the WilderHill Clean Energy ETF is 12.7, which also isn't the mere result of heavy subsidies. These companies are actually profitable, and should become more so if crude prices remain high.

Steel is Still a Steal
What can the Market Vectors Steel ETF (NYSE:SLX) do that a garden variety materials fund can't? Apparently quite a bit.

This fund only invests in stocks that directly participate in the creation of steel, which explains its lousy performance in the last half of 2008. It was simply mirrored a drastic cut in steel prices. Since early 2009 though, steel prices have rebounded and SLX has gained more than 160%.

Why do investors need the Market Vectors Steel ETF now? As surprising as it may be, not all commodity and metal prices move in tandem anymore. Steel's uptrend seems a little stronger and more stable than other metals.

The Bottom Line
While Tuesday's marketwide implosion implies there's some risk in owning anything right now, all the trends driving the underlying forces mentioned above are bigger than just some emotionally-driven volatility for stocks; all of these are bigger trends that should last for quite some time. Some of the ETFs you were laughing at not so long ago are now well worth investing in. (For related reading, see ETFs: How Did We Live Without Them? and Introduction To Exchange-Traded Funds)

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