Exchange-traded funds offer a convenient way to invest in big or small groups of companies that interest you. If you expect the economies outside U.S. borders to thrive as a global recovery eventually heats up, the Vanguard FTSE All-World Ex-U.S. ETF (NYSE: VEU) 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 lots 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 a very low 0.22%. It also sports a dividend yield above 2%.

This ETF has performed reasonably well, but it's also very young, with just three full years on the books. It suffered in 2008, as did most equity investments, but booked strong gains in 2009 and 2010. In this rocky year, it's slightly in the black. 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 low turnover rate of 6%, 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. Mobile telecom giant Vodafone (NYSE: VOD), for example, gained about 17% over the past year, and is sitting on many billions in cash, which it can use to boost growth or reward shareholders. Through its 45% stake in Verizon (NYSE: VZ) Wireless, it's collecting more billions, with plans to issue a big dividend in February.

Royal Bank of Canada (NYSE: RY) gained 8%, and has posted double-digit income gains recently. But some aren't thrilled that it shed its U.S. retail banking business to PNC Financial Services (NYSE: PNC). Critics believe that the company isn't the biggest bargain right now.

Other companies didn't add as much to the ETF's returns last year, but could have an effect in the years to come. Spanish telecom concern Telefonica (NYSE: TEF) lost about 3% over the past year, but it's generating lots of free cash flow. It operates not only in Europe, but also in South America. In addition, it offers a hefty dividend, recently yielding more than 8%. Spain-based Banco Santander (NYSE: STD) lost 21%, as many banks have been struggling in recent years. But it does far more business in Latin America than in Spain, which bodes well since those economies are growing more briskly than Europe's.

The big picture
A well-chosen ETF can grant you instant diversification across any industry or group of companies -- and make investing in and profiting from it 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 ."