Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the oil services industry to thrive over time as our reliance on oil doesn't disappear anytime soon, the Market Vectors Oil Services ETF
If you're familiar with ETFs and think that the OIH ticker looks familiar, but the fund's name doesn't, you're right. This ETF is one of several replacing Merrill Lynch-based HOLDRs which had some problems that these funds don't.
ETFs often sport lower expense ratios than their mutual fund cousins. The Market Vectors ETF's expense ratio -- its annual fee -- is a low 0.35%.
This ETF doesn't have much of a performance record yet, as it's just a few weeks old. It's relatively small, too, so if you're thinking of buying, beware of occasionally large spreads between its bid and ask prices. You might want to just keep an eye on it as it matures a bit, or you might want to be an early investor. Remember that as with most investments, 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 oil services stocks have done well over the past year. Seadrill
Other companies didn't do as well last year, but could have an effect in the years to come. McDermott International
The big picture
Demand for oil is likely to be with us for quite a while. 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.