Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect technology-oriented companies to thrive over time due to innovations and demands for increased efficiency, the iShares Dow Jones US Technology ETF (NYSE: IYW) 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 iShares ETF's expense ratio -- its annual fee -- is a relatively low 0.47%.

This ETF has performed reasonably, beating the S&P 500 over the past five years, but lagging it a bit over the past 10. 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 very low turnover rate of 8%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.

What's in it?
As you'd expect, some growing tech stocks did well for the ETF recently. Intel (Nasdaq: INTC), up 25% in the past year, has many excited about its new line of Ultrabook laptops. Its heavy R&D spending bodes well for its future, and even after last year's gain, its stock still looks inexpensive.

Qualcomm (Nasdaq: QCOM), up 8%, is sitting on a pile of valuable patents for which it rakes in royalties. It also stands to profit as the developing world starts buying more electronic goods, using its patents and also its chips.

Other companies haven't done as well lately but have plenty of future promise. Glass giant Corning (NYSE: GLW) shed 27%, leading my colleague Rich Smith to refer to "the year Corning cracked." Weak LCD TV sales were partly to blame, but sales of large-screen TVs have been growing, and Corning's Gorilla Glass's future looks bright as tablets and smartphones proliferate.

Cisco Systems (Nasdaq: CSCO) also lost ground, dropping 8% as it narrowed its focus, shedding products such as its Flip cameras and Umi home video-conferencing systems. Its performance is likely to pick up in 2012, but some remain unthrilled, as the company's growth rate isn't likely to be as strong as in the past.

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.

Learn about the 5 ETFs That Could Soar in 2012. And if you're looking for some great investments beyond ETFs, consider these 12 Dividend Stocks for 2012.