Herb Greenberg's Weird ETFs Revisited

Petri Artturi Asikainen | Folio Images | Getty Images; CNBC composite

Last year we listed eight ETFs that we thought were just, well, plain weird, including two that we lumped in because they seemed wrongheaded.

Two of the weird ones -- the Russell 1000 High Volatility ETF and the QuantShares U.S. Market Neutral Anti Momentum Fund (presciently given the symbol, NOMO) -- were so weird that they are no more.

The iPath DJ-UBS Natural Gas ETN (the GAZ) and the iPath S&P 500 VIX Short-term Futures ETN (better known as the VXX) might as well be no more. Both have collapsed.

As for those that I thought were wrongheaded -- The Global X Guru Holdings Index Fund and the AlphaClone Alternative Alpha ETF -- I just don't like the concept of piggybacking on investors. And that's what these funds do -- invest alongside big hedge funds.

(Read more: ETFs vs. Mutual Funds: The Debate Heats Up)

Based on their performance (up!), they may not be so wrongheaded, after all. Time will tell whether that's the result of true genius, or just a bull market.

That brings us to today's weird funds. Just like last year, we checked with Matt Hougan of Index Universe. His list -- and in his words:

1. The VXX -- Again.

How much further down can an ETF go, when it's already down 98.6 percent over the last three years?

The answer: Another 98.6 percent. VIX futures continue to be in a state of contango so vicious that, if spot VIX stays flat and the shape of the future curve stays the same, VXX should lose more than 80 percent of its value over the next 12 months.

Since it launched, investors have poured $5.6 billion into VXX; only $994 million remains. But investors never learn: they've poured more than $350 million into the fund this year alone.

Somebody's getting rich; it's just not VXX investors. (VXX could of course spike up if the market go crazy. But long-term, there is nothing but pain.)

2: GIVE: Global Echo ETF

This actively managed ETF is appropriately named, because it actively forces shareholders to GIVE lots of money to the ETF company.

(Read more: How Investing Is Just Like Working at Jiffy Lube)

This ETF, whose focus is "sustainability and making an impact," seems to be build on the idea that if you combine the red-hot ETF wrapper with the semi-famous grandson of a great ocean explorer Jacques Cousteau, what can go wrong?

I'll tell you what. Start with expenses of 1.70 percent! This is a pet peeve of mine. I'm all for socially responsible investing, but why does it always cost five times more than regular investing. Or in this case, why is this ETF 30 times more expensive that what it would take to buy virtually the same exposure using large-cap ETFs?

That cost -- 1.70 percent would make mutual funds blush. No wonder if hasn't attracted much interest. Note: You have to love this tidbit from the fund's home page: "Additionally, AdvisorShares regularly contributes a portion of assets under management to Philippe Cousteau Jr.'s Global Echo Foundation."

I understand what they mean -- a portion of the expense ratio (which is, in the end, deducted from the assets). But the way it's written, it sounds like they can randomly decide to donate 25 percent of the fund to Phillipe's foundation.

AdvisorShares CEO Noah Hamman responded with this statement:

"The prospectus for GIVE specifically identifies that 40 basispoints is contributed to the GlobalECHO Foundation, and we are pleased to announce that we have contributed almost $17,000 to the GlobalECHO Foundationfor 2012," he said. "Regarding the fee, GIVE is an impact investing strategy with four seasoned investment managers, who are seeking to outperform comparative benchmarks on a risk adjusted basis. The average prospectus expense ratio for the multi-asset alternative category in Morningstar is 2.04 percent. GIVE is a brand new ETF that is priced almost 15 percent lower than that category average."

3. FactorShares 2X TBOND Bull/S&P 500 Bear (FSA)

I like the FactorShares guys, and they are doing interesting stuff, but if you had to design an ETF destined to: a) be misunderstood by most investors and b) go to zero, this would have to be it.

Let's see: You lever up a 200 percent position in T-Bonds, at the end of a 40-plus year bull market in bonds; you match that with a -200 percent position in the S&P 500. You reset it daily, so you have all the wonders of levered/inverse compounding. And you charge 0.75 percent per year.

But hey, at least you can trade it for free on Interactive Brokers.

To be fair, they also offer the opposite position (-200 percent T-Bonds/200 percent S&P 500).

But you still have the compounding. It just ain't pretty.