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 (NYSE: VHT) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
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 (Nasdaq: ISRG), for instance, surged 50%, as more hospitals bought its robotic surgery machines, and it enjoyed repeating revenue from service contracts and sales of supplies and accessories for those machines. Growth abroad can boost its performance even more.

Big biotech company Amgen (Nasdaq: AMGN) advanced 20%, despite some worries about its debt and expiring patent protection issues. Some investors are pleased that the company is making moves such as reducing some of its risks by partnering with AstraZeneca. Meanwhile, the company just introduced a dividend, recently yielding 2.2%.

Yielding a whopping 5% recently, Eli Lilly (NYSE: LLY) gained 16% over the past year. The company received FDA approval a few weeks ago for its radioactive agent Amyvid, which is used in diagnostic tests to help detect Alzheimer's. It is also offering up to $150 million to venture-capital firms, thereby investing in startups -- with the right to buy some promising compounds.

Other companies didn't do as well last year, but could see their fortunes change in the coming years. Express Scripts (Nasdaq: ESRX) gained just 3%. Its merger with Medco Health Solutions gives it a 40% market share in pharmacy-benefits management and 60% of the mail-order drug business. When Express Scripts and Walgreen broke up their partnership recently, Walgreen took a big hit, losing a lot of customers and revenue. If the companies were to find a way to work together, it could be a big win-win result, benefiting both.

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.

Learn about 4 ETFs You Can Count On. And if you're looking for some great investments beyond ETFs, consider these 5 Stocks Growing Their Dividends by 20% Per Year.