Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the health-care industry to thrive as the world's population grows, gets older, and develops medical conditions, the Vanguard Health Care ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The Vanguard ETF's expense ratio -- its annual fee -- is a very low 0.19%. (Vanguard is known for low fees.)
This ETF has performed reasonably well, outperforming the S&P 500 over the past five years, but underperforming it over the past three. 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 an ultra-low turnover rate of 7%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
Plenty of health-care companies had strong performances over the past year. Intuitive Surgical
Big biotech company Amgen
Yielding a whopping 5% recently, Eli Lilly
Other companies didn't do as well last year, but could see their fortunes change in the coming years. Express Scripts
The big picture
Demand for health-care 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.