Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect technology-heavy companies to thrive, the Technology Select Sector SPDR ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The technology ETF's expense ratio -- its annual fee -- is a low 0.20%.
This ETF has performed reasonably well, beating the S&P 500 (INDEX: ^GSPC) on average over the past three and five years, and roughly matching it over the past decade. 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 5%, 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. Enterprise-storage giant EMC
Other companies didn't add as much to the ETF's returns last year but could have an effect in the years to come. Corning
The big picture
Demand for technology 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.