Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect undervalued large-cap stocks, of which there are many, to appreciate as they eventually get closer to their intrinsic value, the Vanguard Mega Cap 300 Value Index ETF (NYSE: MGV) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in several dozen of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The Vanguard ETF's expense ratio -- its annual fee -- is an ultra-low 0.13% -- and it yields more than 2% annually in dividends.

This ETF has not outperformed the market over its life, but it's also very young, with just three full years on the books. That's not a long enough time in which to draw meaningful conclusions, especially as the nation digs out from a recent recession. As with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

With a low turnover rate of 26%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.

What's in it?
Several of this ETF's components made strong contributions to its performance over the past year. Altria (NYSE: MO) gained about 26%, but its future may not be as glorious as its past, as it battles increased taxes and regulations, and the high unemployment plaguing its customers. Still, demand from those who can't or won't quit smoking should prop up its stock somewhat, alongside other tobacco companies such as its global counterpart, Philip Morris International (NYSE: PM).

United Technologies' (NYSE: UTX) elevator business should profit as the global economic recovery gains traction and emerging nations further develop. Infrastructure improvements should help as well, while big recent orders for airplanes should also keep its engine division busy. The stock is up 12% in the past year.

Other companies didn't add as much to the ETF's returns last year, but they could have an effect in the years to come. Intel (Nasdaq: INTC) gained just 7%. It's recently reduced its forecast for PC shipment growth, as its Atom chip faces tough competition from the low-power designs of ARM Holdings (Nasdaq: ARMH) and MIPS Technologies (Nasdaq: MIPS). But it's also seeing strong growth in its microprocessors for data storage and data networking, and the company has become a dividend powerhouse.

General Electric gained 8% and has been hiking its dividend significantly in recent years, after a big recession-related cut. Investors stand to benefit as the company expands in China and invests in alternative energy businesses, among many others.

The big picture
A well-chosen ETF can grant you instant diversification across the industry -- and make investing in and profiting from the sector that much easier.

ETFs can help you find the way to better investing results. To find some great ETF investing ideas, take a look at The Motley Fool's special free report, " 3 ETFs Set to Soar During the Recovery ."