Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the information technology (IT) industry to prosper over the long term as our world's technological needs grow and innovations continue, the Vanguard Information Technology ETF (NYSE: VGT) 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 a lot 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 rather well, beating the world markets handily 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 very low turnover rate of 6%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.

What's in it?
Several IT companies had strong performances over the past year. Intel (Nasdaq: INTC), for instance, gained 26%, continuing to dominate the PC-chip world. Its latest challenge, though, is to become a bigger player in the mobile-chip world, where competitors have strong footholds. Intel's pockets and talent are deep, though, so its chances of success are not insignificant. The company is innovating with chips for cloud storage, too, and sports a solid 3.2% dividend, as well.

Broadcom (Nasdaq: BRCM), up 4%, posted somewhat disappointing earnings recently, but is making some smart acquisitions that can boost its presence in mobile computing. Broadcom products are found in many iDevices, as well, which bodes well for its performance prospects.

Other companies didn't do as well last year, but could see their fortunes change in the coming years. Corning (NYSE: GLW), down 27%, is far from a lost cause with its very successful Gorilla Glass. Weak demand for its LCD offerings has hurt the company, but LCD television sales are expected to pick up. Meanwhile, its Gorilla Glass is embedded in many mobile devices (which are exploding in popularity), and the company is a major fiber provider for growing networks, too.

Cognizant Technology Solutions (Nasdaq: CTSH), a specialist in IT consulting and outsourcing, fell 21%, but its revenue and earnings have been growing at a healthy clip. Growth is expected to slow, though, thanks to a sluggish world economy. It sports solid 14% net profit margins and little debt, but some are still wary. Goldman Sachs, for example, recently downgraded it to a "sell" rating, on concerns over its valuation, its exposure to the financial arena, and slowing growth.

The big picture
Demand for information technology 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.

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