Happy Holidays! Many people have the last day of the year off, but not stock and ETF traders. Since 2011 New Year’s Day falls on a Saturday, the NYSE and other exchanges are open for a full day.

This is good news in one way: You have an extra trading session to get rid of some clutter in your portfolio and start the New Year fresh. Today I’m going to name six potential ETF sell candidates. You may be surprised at some of the names below. Read on …

ETF to Dump #1: SPDR S&P 500 (SPY)

The time has come to sell SPY, the granddaddy of all ETFs, even though it may be the most liquid and heavily-traded security in the world.

Two other ETFs track the same index as SPY: iShares S&P 500 (IVV) and Vanguard S&P 500 (VOO). Are they any different? Yes, they are. Assuming you want to be in the S&P 500, here are three reasons to avoid SPY.

At 0.09 percent, SPY’s expense ratio is 50 percent higher than VOO, which charges only 0.06 percent. Vanguard is rarely undersold on fees!

VOO can be traded commission-free at Vanguard’s brokerage arm, while IVV has no transaction fee for Fidelity customers. Currently no major brokerage firm offers a fee-free trading program for SPY.

The real kicker is dividend payments. Few investors realize it, but SPY can take more than a month to deliver your quarterly dividend check. IVV and VOO both manage to pay out dividends in a week or less.

If you are a day trader, the liquidity of SPY may outweigh these negatives, but for most investors VOO and IVV are better choices.

ETF to Dump #2: Alerian MLP ETF (AMLP)

As I’ve said before, master limited partnerships, or MLPs, are often a great investment. They typically have high dividend yields and have generated significant capital gains the past few years.

So what’s the problem with AMLP?

Well, it is the only ETF on the market that is not a pass-through entity for tax purposes. AMLP is structured as a C corporation, which means it pays 35 percent federal taxes plus various state taxes on all its price gains.

The roughly 1,000 other ETFs and ETNs pay none. The result: AMLP significantly underperforms its competition and its benchmark.

The impact of “tax drag” on this fund is staggering …

The sponsor handles it by clipping off about 37 percent of each day’s price move, leaving investors with only 63 percent. Investors may also be slammed with additional taxes when they sell their AMLP shares.

While there is no perfect way to access MLPs with exchange-traded products, the way AMLP does it is unquestionably the worst.

ETF to Dump #3: iShares MSCI EAFE (EFA)

If SPY is the granddaddy of all ETFs, then EFA is certainly the standard-bearer for international investing. Unfortunately, EFA is based on a seriously flawed benchmark …

The MSCI Europe, Australasia and Far East (EAFE) Index is thought to cover the world’s equity markets outside the U.S. In fact, it does nothing of the sort!

For one thing, the EAFE overlooks Canada — the third largest non-U.S. market in the world. Furthermore, the EAFE has zero allocation to emerging markets like China. All told, the EAFE Index and EFA cover less than 70 percent of the non-U.S. markets.

If you want complete international exposure with just one ETF, I think you are better off with Vanguard FTSE All-World ex-U.S. (VEU).

ETF to Dump #4: Vanguard Extended Duration Treasury (EDV)

In bond terminology “duration” measures a portfolio’s sensitivity to interest rates. EDV has an extra-large “extended” duration of 27.8, which means it can lose about 27.8 percent of its value for every 1 percent increase in long-term interest rates. This makes EDV the highest-risk Treasury ETF that does not use leverage.

Of course, this also means EDV stands to gain if long-term rates should go down. But with Ben Bernanke keeping the monetary fire hose on full blast, there isn’t a lot of room for rates to drop. Hence I think the risk of EDV far outweighs the upside potential.

ETF to Dump #5: United States Oil Fund (USO)

Despite what its name implies, this fund does not track the price of crude oil. USO is 100 percent invested in “front month” oil futures and must therefore roll over 100 percent of its assets each and every month. With oil markets currently in contango (i.e. prices are higher as you go out in time), USO loses money every time it rolls the portfolio.

Unfortunately, no other exchange-traded products can accurately track crude oil prices, either.

One alternative to consider is the United States 12-Month Oil Fund (USL). This fund keeps one-twelfth of its portfolio in each of the next twelve months of crude oil futures. USL is still affected by the negative roll yield, but only 8.3 percent of the portfolio gets hit each month, not 100 percent as in USO.

ETF to Dump #6: CurrencyShares Euro (FXE)

Some of my friends across the pond may not like hearing this, but I am afraid the euro is doomed. It was never a good idea in the first place: Monetary union without political union is just unworkable. Europe is learning this the hard way as Greece, Ireland, and other weak links force the healthier economies to pay for bailouts.

Eventually the Europeans will get this all sorted out. My guess is it will end with either a politically unified continent or a return to individual national currencies.

In either case, there is no reason to go out of your way to get exposure to the euro with an ETF like FXE.

Only Two Days Left to Sell Your Losers

You’ll notice that the ETFs I’ve named are not obscure. All are very popular, in fact. That doesn’t make them good products or good investments. If you own any of these in a taxable account and you’re sitting on an unrealized loss, you have today and tomorrow to sell and get that loss on your 2010 tax return.