Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect industrial-materials companies to thrive as our global economy inevitably gets back on track, the Vanguard Materials ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The Vanguard ETF's expense ratio -- its annual fee -- is a low 0.24%.
This ETF has performed rather well, handily beating the S&P 500 over the past five 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 a low turnover rate of 10%, 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. Cliffs Natural Resources
Phosphate and potash fertilizer giant Mosaic
Other companies didn't add as much to the ETF's returns last year but could have an effect in the years to come. Freeport McMoRan Copper & Gold
The big picture
Demand for industrial materials isn't going away anytime soon. 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.