Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the health-care industry to survive and thrive despite the market's recent swoon, the Health Care Select Sector SPDR ETF (NYSE: XLV) could save you a lot of trouble. (Health care is a defensive industry, more resistant than many to the market's roiling.) 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 health-care ETF's expense ratio -- its annual fee -- is a very low 0.20%.

This ETF has performed reasonably well, outpacing the S&P 500 over the past three, five, and 10 years. 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 an ultra-low turnover rate of 4%, 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. HIV specialist Gilead Sciences (Nasdaq: GILD) gained about 6% over the past year, as it transforms into more of a cancer-fighting concern via strategic acquisitions and a partnership with Yale. Pfizer (NYSE: PFE), up 15%, has partnered with seven New York hospitals and the University of California. Pfizer is also aiming to get an over-the-counter version of Lipitor approved, which could generate helpful revenue as the drug comes off its patent protection.

Other companies didn't add as much to the ETF's returns last year, but could have an effect in the years to come. Amgen (Nasdaq: AMGN), for instance, sunk about 9% over the past year, but investors are excited about its deal to grab a piece of Micromet's (Nasdaq: MITI) BiTE antibody technology. Celgene (Nasdaq: CELG), meanwhile, lost about 4%, depending on cancer treatment Revlimid for the majority of its revenue. Sales have increased for the drug, but that's partly due to price hikes. Some wonder whether Celgene might be acquired.

The big picture
Demand for health care isn't going away anytime soon. A well-chosen ETF can grant you instant diversification across the industry -- and make investing in and profiting from its companies 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 ."