They can be. It depends on many factors. A niche can be a small segment of the market, a specific sub-segment or a thematic area that goes across multiple sectors. As a result the performance often reflects the current market environment or certain industry/sector fluctuations. Niche ETFs can be opened quickly based on perceived investor demand. They can also close quickly because of poor performance or the inability to maintain enough assets to cover operating costs.
On the other hand, many niche ETFs are extremely successful and are well-poised to take advantage of long-term, innovative changes around the globe and how these changes will transform and effect financial markets.