Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add some copper stocks to your portfolio but don't have the time or expertise to hand-pick a few, the First Trust ISE Global Copper Index ETF (NASDAQ: CU) could save you a lot of trouble. Instead of trying to figure out which copper stocks 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. This ETF, focused on copper stocks, sports an expense ratio -- an annual fee -- of 70%. The fund is fairly small, too, so if you're thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.

This ETF has underperformed the world market over the past three 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.

Why copper stocks?
Whereas gold is seen as a valuable metal that can prop up a portfolio, it's not the most useful of metals. Copper is a metal often in demand -- it's used in construction, for example, for piping. (And it will now be used in Army bullets, too!) The recovering real-estate market bodes well for the future of copper stocks.

More than a handful of copper stocks had strong performances over the past year. Freeport McMoRan Copper & Gold (FCX -1.96%) is up more than 30% from its 52-week low. The world's second-largest copper-producer, like its peers, has been challenged by falling copper and gold prices and a slowdown in China. However, while that can be brutal for some metals companies, Freeport McMoRan Copper & Gold is exceptionally well-diversified, producing several metals and now heavily involved in the energy industry due to its acquisition of oil and gas exploration and drilling companies. Also promising is a new contract with its CEO, who is giving up salary in exchange for stock, which keeps his interests aligned with those of shareholders. While some wait for better days, other see Freeport's stock -- and its 3.3% dividend -- as appealing.

Other copper stocks didn't do quite so well over the last year but could see their fortunes change in the coming years. Southern Copper (SCCO -1.74%), Freeport's largest U.S.-based competitor, sank by 24% and yields 1.7%. (Its payout has fallen in recent years.) It, too, has been hurt by the recent economic environment, but many see its problems as temporary, not serious or long-term. Copper inventory levels dropping sharply over the past year also seem promising. Southern Copper's mine life is much longer than those of its key rivals. However, the company has taken on a lot more debt as it invests in infrastructure, and it faces rising, margin-pinching taxes.

Taseko Mines (TGB -0.42%) slumped 32%, posting some ugly numbers in recent years, such as growing losses and negative free cash flow, along with shrinking profit margins. In British Columbia, where it has high hopes for its New Prosperity copper and gold project, Taseko Mines has been challenged by local indigenous groups and a flawed environmental-review process. Taseko's third quarter featured a 7% drop in operating costs, with revenue up 10% and net income swinging to a gain from a year-earlier loss.

Turquoise Hill Resources (TRQ), majority-owned by U.K.-based mining giant Rio Tinto, plunged 42%, and a glance at its recent headlines features a lot of items related to legal wrangling. Turquoise Hill Resources focuses primarily on mineral mining in central Asia and Australia, and its Mongolian Oyu Tolgoi mine has been expected to become one of the world's largest copper mines. But an impasse at Oyu Tolgoi has led it to tap the equity market in order to keep up with its debt payments. (The company used to be known as Ivanhoe Mines.)

The big picture
If you're interested in adding some copper stocks to your portfolio, consider doing so via an ETF. 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.