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.

Russell Investments research indicates that small-cap stocks tend to do well after a recession, indicating their possible outperformance once the market has hit its bottom. This theory has been reinforced since the market lows reached on March 9. Since then, Ian Wyatt for SmallCapInvestor says, the majority of stocks gaining on any particular day have been of the small-cap variety.

Why? Chalk it up to nimbleness. Small-caps can shift and change strategies as market conditions change much more easily than larger companies can.

Meanwhile, the iShares Russell 2000 (IWM) is up 45.9% off the March 9 market low. Traders are watching these indicators, although the jury is still out on whether a turnaround within the market has actually or will occur. Just remember, be ready with an entry and an exit strategy and watch the trend lines, because time will only tell.

Don’t forget about international small-caps, either. Many European small-caps are faring well in a down economy.

• SPDR S&P International Small Cap (GWX): up 14.1% year-to-date

• iShares S&P Small Cap 600 Index Fund (IJR): down 0.1% year-to-date

• Vanguard Small Cap (VB): up 8.1% year-to-date

• WisdomTree Small Cap Dividend Fund (DES): down 7.6% year-to-date

Mark Hulbert for MarketWatch reports that the January effect is the seasonal tendency for stocks of small companies to outperform the large-caps around the turn of the year. Research indicates that this pattern has been true for more than two decades and further digging into the backtesting proves that this pattern has been solid in many decades prior to that, as well. The January effect may be the strongest historical pattern that researchers have noted in the stock market.

But there’s some caution this time around. The reason is because the January effect actually exists because of the appetite of investment managers’ for riskier stocks at the start of the new year. Haven’t we all seen a large enough dose of risk over the past six months? If the bear market continues with its voracity and another downturn occurs, managers will steer clear of risky small-caps.

Whether it’s real or not, just stick to the strategy of watching for the 50 day-moving average before jumping in and wait to see a trend really develop instead of relying on past history. Some small-cap ETFs include:

• iShares Russell 2000 ETF (IWM): down 38.8% year-to-date

• Vanguard Small Cap (VB): down 40.7% year-to-date

No asset class has been spared in this bear market, but over the long-term, small-cap funds have performed slightly better than their mid- and large-cap brethren. One typically expects small-caps to get pummeled, since they have less diversified revenue resources, are not as globally diversified and have a harder time generating capital, explains Kyle Waller for Seeking Alpha.

Performance has not been consistent, however, as three different ETFs from the same asset class vary widely:

• iShares S&P Small Cap 600 Index (IJR): down 33.7% year-to-date; 19.1% financials; 16.9% industrial materials

• Vanguard Small Cap (VB): down 38.4% year-to-date; 17.3% financials; 16.2% industrial materials

• iShares Russell 2000 Index (IWM): down 35.7% year-to-date; 21.6% financials; 14.5% industrial materials

All three funds are constructed and weighted differently; companies in IJR have to be trading at least 12 months, with four straight profitable quarters and be tested for liquidity before inclusion. VB and IWM have a more passive index methodology approach.

While small-caps haven’t been spared in the turmoil, we expect them to bounce back from a downturn better than most because their small size makes them more nimble and resilient in a market recovery.

•If history is to repeat itself, is there a small-cap stock and exchange traded fund (ETF) rally on the horizon?

Outperformance by small-cap stocks has generally followed market bottoms of recessions, so says Merrill Lynch. But first we have to figure out if we are even in a recession. Despite this, some investors have already begun placing their bets on stocks of smaller companies, reports Norm Alster for The New York Times.

During the second quarter, small-cap stocks lost 1.6% on average compared to the S&P 500 losing 3.2%, or 4.0% for large-cap value funds. The major weight on small-caps will be the financial sector, which could drag down the performance, as most of the stocks are not cheaply priced.

In an economic recovery, small-caps tend to perform best because they’re nimble and quicker to act when the market conditions are favorable.

Small-cap technology and health-care companies are the main contenders for the small-cap growth stocks that are looking like a better buy than value, according to one strategist. ETFs within the small-cap realm:

• iShares S&P SmallCap 600 Index Fund (IJR), down 9.9% year-to-date
• iShares Russell 2000 Index Fund (IWM), down 10.9% year-to-date
• Vanguard SmallCap (VB), down 11.1% year-to-date