Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect consumer products companies to prosper as our domestic and global population grows and economies improve, permitting more purchasing, the PowerShares Dynamic Consumer Discretionary ETF
The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The PowerShares ETF's expense ratio -- its annual fee -- is 0.60%, which is a bit steeper than some other ETFs, but far lower than the typical stock mutual fund.
This ETF has performed reasonably well, beating the S&P 500, on average, 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.
What's in it?
Several consumer stocks have done very well over the past year. McDonald's
Not as venerable, but also with an impressive long-term record, is priceline.com
Other consumer companies haven't done as well lately but could rebound in the future. Ford
Ford has been turning itself around well, though, and its revamped Fusion looks to be a strong competitor for the Camry and Accord. Fool analyst Jacob Roche isn't so excited about Tenneco, though, noting recently that its debt is massive, with interest threatening the company's ability to service the debt.
The big picture
Demand for consumer discretionary products tends to drop during tough times, but it won't go 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.