Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect aerospace and defense companies to prosper over the long haul as peace remains elusive to civilization, and airplanes are not made obsolete by personal jet packs, the iShares Dow Jones US Aerospace & Defense ETF
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%. The fund is small, too, so if you're thinking of buying, beware of occasionally large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.
This ETF has performed reasonably well, beating the S&P 500, on average, over the past three and 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 low turnover rate of 10%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
Several aerospace and defense companies posted net gains over the past year. Textron
Other companies didn't do as well last year, but could see their fortunes change in the coming years. United Technologies
Huntington Ingalls Industries
The big picture
Demand for aerospace and defense products and services 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.