Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you want to invest in socially responsible companies, the iShares MSCI USA ESG Select Social ETF
The fund tracks the MSCI USA ESG Select Social index, which screens for companies with good records on environmental, social, and governance, or ESG, issues relative to their peers and the overall market. It then weights them in the index according to how strong their scores are.
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 0.50%.
This ETF has performed reasonably well, 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 turnover rate of 35%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
Several of the companies that meet the ETF's standards have performed well over the past year. Spectra Energy
Other companies haven't done as well lately but could bounce back in the years to come. Japan-based insurer AFLAC
The big picture
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. And socially responsible companies can be very profitable, too.
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.