Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the biotech industry to thrive as our population grows and ages and more treatments are sought for various health conditions, the SPDR S&P Biotech
The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The biotech ETF's expense ratio -- its annual fee -- is a relatively low 0.35%.
This ETF has performed reasonably well, lagging the S&P 500, on average, over the past three years, but beating it over the past five. 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.
What's in it?
Plenty of biotech companies had strong performances over the past year. Ariad Pharmaceuticals
Other companies didn't do as well last year, but could see their fortunes change in the coming years. Dendreon
Vertex Pharmaceuticals
Human Genome Sciences
The big picture
Demand for biotech products 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.