Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add some mid-cap companies to your portfolio because they're small enough to have significant room for growth and large enough to have executed their strategy well in past years, the WisdomTree MidCap Earnings ETF (NYSE: EZM) 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. It invests in medium-sized companies that have reported net gains in the past year.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The WisdomTree ETF's expense ratio -- its annual fee -- is a relatively low 0.38%. The fund is fairly 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 rather well, topping the S&P 500 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 18%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.

What's in it?
It's been a rough time for the overall market over the past few years, and the past few months have erased many recent gains. (Fortunately, for most of us, it's the long run that matters.) Whirlpool (NYSE: WHR), for example, fell about 27% over the past year. One wouldn't expect the maker of appliances (with brands such as Maytag, Amana, KitchenAid, and Jenn-Air) to be too volatile, but the stock actually jumped 18% earlier this year, on optimistic projections. The company has sputtered in troubled Europe and even in Asia a bit, but it has been cutting costs and is poised to do well when the housing recovery takes hold.

Atmel (Nasdaq: ATML) shed 51%, with investors disappointed that its touchscreen technology favored by Android devices isn't enjoying the same growth in tablets as in smartphones. (It's also not incorporated in iDevices.)

Falling about 11% was American Capital (Nasdaq: ACAS), a business-development company (or private-equity firm) that has been selling off some businesses while buying back many of its own shares, thereby boosting the value of remaining shares. For that reason, many shareholders like to see buybacks, but they're not the best move if a stock is overvalued or if the company might be able to better deploy that cash.

TRW Automotive (NYSE: TRW), down 31%, has been shedding some businesses to focus more on automotive safety systems. It recently posted revenue up slightly and a drop in net income that still exceeded analyst expectations. Many consumers have been putting off new-car purchases during this tough economic environment. Once car sales pick up more, TRW's future will look brighter. In the meantime, though, some are questioning its CEO's recent bonuses.

The big picture
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.

If you want to profit from the explosive growth in mobile telecommunications and aren't sufficiently excited by Atmel, check out our special free report "The Next Trillion-Dollar Revolution," which will introduce you to a compelling contender for your portfolio.