The number of ETFs available in the market may be confusing, but there are so many choices that investors can customize their portfolios according to their personal preferences and strategy. The ultimate goal is usually the same (to make money), there are two primary categories investors fall into: those who use a fundamental strategy and those who prefer a sector strategy, explains Don Dion for TheStreet. We throw in a third strategy below, too.

Fundamental Strategy: Fundamental ETF portfolios are suitable for investors looking to take advantage of the cost efficiency and tax efficiency of ETFs over an extended time period. These portfolios are usually not traded very often and provide exposure to the broad market while meeting their needs for income.

Investors who find this strategy appealing often cite taxes as the primary lure.

• iShares Dow Jones Select Dividend Index (NYSEArca:DVY): up 4.8% year-to-date

• PowerShares QQQ (NYSEArca: QQQQ): up 42.9% year-to-date

Sector Strategy: A sector ETF strategy is designed to actively capture market trends. Some prefer  a momentum-based strategy to indicate the best times to enter and exit funds. ( The strategy you choose is just as important as the approach). These portfolios are considered active, as they are traded and monitored constantly.

• iShares iBoxx $ High Yield (NYSEArca: HYG): up 23.8% year-to-date

• PowerShares DB U.S. Dollar Bullish (NYSEArca: UDN): up 8.1% year-to-date

A Blend Strategy. We use trend following by monitoring the 200-day moving average in order to find those areas that are moving. By getting in and out of the market at set signals, you give yourself the opportunity to be in the markets for any potential long-term uptrend. The stop loss enables you to put a cap on your losses. The benefit of relying on market signals to determine where and when you invest also removes the “noise” that emotions can generate and cloud your judgment. Any ETF works with this strategy, whether it’s a broad-based, plain-vanilla fund or a more exotic, niche ETF. (How to get in on the rebound).

Always do some research on what you are implementing and consider the liquidity, underlying stocks and pricing taking place in the ETFs you choose.

For more stories about trend following, visit our trend following category.

WisdomTree

The new ETF WisdomTree has in the hopper, the WisdomTree Real Return Fund (NYSEArca: RRF), seeks to give investors long-term returns above the rate of inflation.

Liquidity has flooded the U.S. market, giving rise to investor fears that inflation will soon become an issue. This new fund aims to give investors another way to hedge it, explains Cinthia Murphy for Index Universe.

The fund’s primary goal is for its portfolio to have an average effective duration of two to 10 years, and maturity lengths will vary. The longer the duration of the securities, the more susceptible the fund is to interest rate fluctuations and volatility. (Read on about ways to hedge inflation with ETFs).

RRF will also deliver exposure to commodities, such as energy, precious metals and agriculture. RRF will compete directly with IndexIQ’s newest offering, IQ CPI Inflation Hedged (NYSEArca: CPI). (More about CPI can be found here).

Inflation fears have fueled an increase in products designed to hedge it. PIMCO recently launched the first short-term TIPS ETF, PIMCO 1-5 Year U.S. TIPS Index (NYSEArca: STPZ), and other providers also have TIPS funds. (How TIPS work).

For more stories about TIPs, visit our TIPs category.

• iShares Lehman TIPS Fund (NYSEArca: TIP)

• SPDR Barclay TIPS ETF (NYSEArca: IPE)

PIMCO

• The PIMCO 3-7 Year U.S. Treasury Index Fund (NYSRArca:FIVZ) completes the firm’s lineup of ETFs that cover the key rate segments of Treasury securities. The fund offers exposure to the five-year segment of the curve, have low volatility relative to broader bond markets, and low default risk, as Treasuries are backed by the full faith and credit of the U.S. government.

• The new PIMCO 25+ Year Zero Coupon U.S. (NYSEArca:ZROZ) offers an ETF solution for investors seeking a high level of interest rate sensitivity. ZROZ aims to enable investors to capitalize on expected interest rate movements or efficiently manage long-term interest rate-sensitive liabilities by offering a high duration without using financial leverage.

PIMCO now offers ETFs that span a broad range of Treasury note and bond maturities. This coverage of key Treasury rates is designed to give investors the tools needed to execute yield curve strategies, position for expected changes in interest rates and economic conditions, or maintain long-term allocations toward liquid, high-quality U.S. government securities. (More on PIMCO’s plans).

For more stories about bond ETFs, visit our bond ETF category.

On the one hand, sterling corporate bond prices have been rising. This has been pushing yields down, causing some to second guess whether corporate bonds are the place to be. (More on the corporate bond ETF wave). If this turns out to be the case, then a massive selloff could result, states Matthew Vincent of The Financial Times.

However, analysis of corporate bond spreads tells a different story. Spreads, better known as the difference between the yields on corporate bonds and on safer government bonds,  widened to record levels after Lehman Brothers collapsed last year.

Corporate bond prices fell rapidly in anticipation of widespread defaults by other issuers. This pushed the effective yields from bonds’ fixed-income payouts up toward double figures, suggesting that they are not overbought.  To add icing to the cake, it appears that supply for these bonds, in particular the more risky junk bonds, cannot keep up with demand. (What you should know about junk bond ETFs).

An easy way to access the junk bond market is through the following ETFs:

For more stories on bond ETFs, visit our bond ETF category.

• iBoxx $ Liquid High-Yield (NYSEArca: HYG): up 22.2% year-to-date and has a yield of 9.9%

• PowerShares High Yield Corporate Bond (NYSEArca: PHB): up 18.1% year-to date and has a yield of 9.3%.

• SPDR Barclays Capital High Yield Bond (NYSEArca: JNK): up 31% year-to-date and has a yield of 12.4%

Kevin Grewal contributed to this article.

For every portfolio need, there is an ETF to fill it. Whether you’re looking in a niche area of the market or need an all-encompassing broad-based fund. Here is a simple breakdown from Aaron Levitt on Investopedia to help get you started.

Theme Funds: Some ETFs track an index centered around a theme or niche of the market, ranging from small-caps to solar energy, and everything in between. Examples of this include Claymore Global Solar Energy (NYSEArca:TAN) or Vanguard Small Cap ETF (NYSEArca:VB).

Broad-based “simple” ETFs: Broad-based funds are all-encompassing fund that give total exposure to a segment of the market. There are plenty of broad-based ETFs that can help get any portfolio on the right track. For instance, SPDR S&P 500 (NYSEArca: SPY) and Vanguard Total Stock Market (NYSEArca: VTI) can get you started. (Four rules for ETF investing).

Bonds: This area should not be forgotten, and can add the right amount of diversification from the equity market. Vanguard Total Bond Market (NYSEArca: BND) is a broad-based bond ETF that covers most bases. (How bonds are overcoming challenges).

Extras: Once the core of your portfolio is in place, you can play around with the extras and the niche or fancy funds. iShares S&P North American Natural Resources (NYSEArca: IGE) is a good example of this. (Do alternative ETFs belong in your portfolio?)

Becoming a good trader: Being a good trader involves education, time, patience, trial and error and a willingness to examine your good moves along with the bad ones. (10 tips to improve your ETF game).

A Plan: Last, but not least, you need a plan for investing. Assess your risk, your time horizon and your strategy. We use a trend following strategy, which you can read about in The ETF Trend Following Playbook.

For more stories about ETFs, visit our ETF 101 category.

Research firm EPFR Global reported that net assets have been flowing out of U.S. equities, but money market funds did not benefit from those outflows, writes Gary Gordon for ETF Expert.

The money had to go somewhere, and go somewhere it did: to emerging market stocks and emerging market bonds. In fact, emerging market bonds raked in almost $1 billion in a single week. It was the largest weekly inflow ever on EPFR’s record books. (Six things you’re missing by not going global).

For more information on emerging markets, visit our emerging market category.

Here are three ways to invest in emerging market bonds now:

• PowerShares Emerging Mkts Sovereign Debt (NYSEArca: PCY): up 34% year-to-date; yields 6.08%; expense ratio of 0.5%; The fund is based on the DB Emerging Market USD Liquid Balanced Index. 90% of total assets are invested in securities. The Index tracks the possible returns of liquid emerging markets U.S. dollar-denominated government bonds issued by 22 emerging countries.

• iShares JPMorgan USD Emerg Markets Bond (NYSEArca: EMB): up 13.6% year-to-date; yields 5.69%; expense ratio of 0.6%; The fund seeks to reflect the investment results that reflect the price and yield performance of the JPMorgan EMBI Global Core Index, with bonds issued by 23 countries.

• Templeton Emerging Markets Income Fund (NYSE: TEI): up 53.5% year-to-date; yields 7.2%; TEI is a close-end fund (CEF) that trades on an exchange. TEI is not a dollar-denominated fund, which can prove fruitful if the U.S. dollar is weak. The fund invests in income-producing securities of sovereign or sovereign-related parties and companies in emerging market countries.

Max Chen contributed to this article.

John Spence of Market Watch said that taxable bond ETFs brought in the biggest gains in assets in September. Year-to-date,  taxable bond ETFs have brought in about $26.7 billion of new assets, which makes it the most popular ETF category so far in 2009. (How to use ETFs to diversify away from the dollar).

Not all bond ETFs are created the same.  The iShares Barclays TIPs Bond ETF (NYSEArca: TIP) has been one of the most popular, doubling in size to boast nearly $16 billion in assets.  What makes TIPS so attractive is that they enable investors to hedge against inflation because their returns are based on the rate of inflation. (How TIPS work).

Other TIPS ETFs include:

• PIMCO Broad U.S. TIPS (NYSEArca: TIPZ)
• PIMCO 15+ Year U.S. TIPS (NYSEArca: LTPZ)
• PIMCO 1-5 Year U.S. TIPS (NYSEArca: STPZ)
• SPDR Barclays Capital TIPS (NYSEArca: IPE)

Another class of bond ETFs that has seen nice growth is investment-grade corporate bond ETFs.  Take a look at the iShares iBoxx Investment Grade Corporate Bond Fund (NYSEArca: LQD), which has about $13 billion in assets, a yield of 5.3% and is up 8.3% year-to-date.

In addition to bond ETFs seeing growth and an inflow of assets, commodity ETFs and emerging market ETFs have as well, thanks much to risk appetite coming back into the marketplace. (Five ways to fight inflation with ETFs).

For more stories on bond ETFs, visit our bond ETF category.

For full disclosure, Tom Lydon’s clients own shares of LQD.

Kevin Grewal contributed to this article.

iShares

iShares’ proposed line of new funds will hold muni bonds, and the funds themselves would target certain maturity dates.

Each fund would hold the underlying securities from its respective index to full maturity, at which point the fund would simply retain a cash position, according to Index Universe staff. After the last holding of the fund hits maturity, which is on or around Aug. 31 of the year in the fund’s name, the assets would be distributed to shareholders.

The funds would track indexes in the recently launched S&P AMT-Free Municipal Bond Index Series, which track investment-grade muni bonds that mature between June 1 and Aug. 31 of a specific year. (Bond ETF hot spots).

These are the first ETFs that would have maturities fall within a specific date range. They act almost like muni bonds, in that they make tax-exempt distributions and return an entire investment on a specific date. (What you need to know about bond ETFs).

For more stories about bond ETFs, visit our bond ETF category.

The two new ETFs PIMCO is adding to their lineup include:

• PIMCO 3-7 Year Year U.S. Treasury Index Fund (NYSEArca: FIVZ)
• PIMCO 20+ Year Zero Coupon U.S. Treasury Index (NYSEArca: ZROZ)

Cinthia Murphy for Index Universe notes that the annual expense ratio for both funds is set at 0.15%.

When it launches, ZROZ will face off with the Vanguard Extended Duration Treasury (NYSEArca: EDV), which launched in December 2007, which tracks the Treasury STRIPS 20-25 Year Equal Par Bond Index. FIVZ will face the iShares Barclays 3-7  Year Treasury Bond Fund (NYSEArca: IEI).

STRIPS are Treasury bonds are securities that are sold at a discount to their face value. They don’t offer interest payments because they mature at par. The securities were first offered in 1985. (More on what PIMCO is doing).

For more stories about bond ETFs, visit our bond category.

As a rule of thumb, bonds and ETFs that track them invest in stocks that can be hard to trade. As investors continue to seek returns within the fixed income market, especially with ETFs, the indexes upon which the funds are based are becoming compromised, reports Randall W. Forsyth for Barron’s. (Why high-yield bonds are in favor).

A case in point is the rapid expansion of the iShares iBoxx $ Investment Grade Corporate Bond Fund (NYSEArca: LQD). LQD rose to $13.3 billion in assets to become the ninth-largest ETF in the United States. iShares found itself in a position in which it had to accommodate the new growth and broaden the criteria for bonds that are eligible to be included in LQD.

The vast majority of corporate and municipal bonds do not necessarily trade every day, Forsyth points out, including the issues included in the indexes upon which ETFs are based.

That said, bond ETFs are still enormously popular. They’ve gotten more than half of the new cash flowing into ETFs, reports Eleanor Laise for The Wall Street Journal. Bond ETF providers are aware of the challenges in building bond ETFs, and strive to build them so that their ETFs work optimally. (Why bonds are so popular).

For more stories about municipal bonds, visit our municipal bond category.

For full disclosure, Tom Lydon’s clients own shares of LQD.