Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the food and drink industry to thrive as our global population keeps growing and human survival continues to require solids and liquids, the PowerShares Dynamic Food & Beverage ETF (NYSE: PBJ) 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. (And it has a charming ticker symbol, as well!)

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The PowerShares ETF's expense ratio -- its annual fee -- is 0.63%. (It's also on the small side, with about $210 million in assets, so proceed with a little caution.)

This ETF has performed rather well, beating the S&P 500 (INDEX: ^GSPC) over the past three and five years, on average. It trounced the S&P 500 in 2010, and is ahead of it again this year. 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 turnover rate of 73%, this fund actually trades fairly frequently, compared to many ETFs.

What's in it?
Several of this ETF's components made strong contributions to its performance over the past year. Green Mountain Coffee Roasters (Nasdaq: GMCR), for example, has tripled in price over the past year. Some worry that it has some patents expiring soon and that it may be overvalued, but it sports a heady growth rate and has struck a deal to fill its Keurig K-cups with Starbucks (Nasdaq: SBUX) coffee. Whole Foods (Nasdaq: WFM), meanwhile, gained 84%, posting double-digit revenue and earnings gains while employing many socially responsible practices, such as keeping executive compensation in check.

B&G Foods (NYSE: BGS), filling grocery shelves with brands such as Ortega and Polaner, advanced about 61%. According to my colleague Ilan Moscovitz, it may be cheaper than it seems, due to its solid free-cash-flow generation.

Other companies didn't add quite as much to the ETF's returns last year, but could have an effect in the years to come. McDonald's (NYSE: MCD), for example, gained 20% over the past year and remains one of the most compelling long-term stocks, able to prosper in good economies or bad. Its big expansion plans for China are just one reason to be bullish on the company.

The big picture
Demand for food and drinks 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.

Learn about the best dividend ETFs. And if you're looking for some great investments beyond ETFs, consider these 10 stocks for your retirement portfolio.