Credit: e-Magine Art via Flickr.

Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add some health care and biotech stocks to your portfolio but don't have the time or expertise to hand-pick a few, the Fidelity MSCI Health Care Index ETF (NYSEMKT: FHLC) could save you a lot of trouble. Instead of trying to figure out which stocks will perform best, you can use this exchange-traded fund to invest in lots of health care and biotech stocks simultaneously.

Why focus on health care stocks? Well, the planet's growing and aging population will keep demand rising for health care products and services -- and will thereby boost the fortunes of health care and biotech stocks. On top of that, Obamacare is ushering more Americans into health coverage, delivering more customers to the companies treating them.

The ETF's basics
ETFs often sport lower expense ratios than their mutual fund cousins. This ETF sports an expense ratio -- an annual fee -- of 0.12%. It's too young to have a meaningful track record, and it's 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.

On your own, you might not have selected Gilead Sciences (GILD -0.56%) or Celgene (CELG) as health care and biotech stocks for your portfolio, but this ETF included them among its 300-some holdings.

A closer look at Gilead Sciences
Gilead has been in the news recently with its recently approved oral hepatitis-C treatment, Sovaldi, which immediately secured blockbuster status by blowing away sales estimates in Gilead's first quarter, raking in $2.3 billion. There's a problem, though: Sovaldi's steep price (about $84,000 for a 12-week course) has met criticism and controversy. Still, Gilead is making the most of Sovaldi, moving forward with a Sovaldi combination drug that could treat even more hep-C cases and applying for approval in the big market of Japan (estimated to be worth $500 million annually).

There's more to Gilead than Sovaldi, though. Its HIV drug Stribild is also selling briskly and might earn blockbuster status, too. Gilead is actually a leader in HIV treatments, which have generated much of its revenue. Meanwhile, Gilead's first quarter blew away expectations, with net income more than tripling over year-ago levels.

Gilead recently announced a doubling of its $5 billion share buyback plan. That can make a meaningful difference to shareholders by boosting the value of existing shares, but only if the company is buying back the shares at attractive prices. Fortunately, that seems to be the case, as Gilead seems appealingly priced with a forward P/E ratio near 11 and less than half its five-year average value -- even as the stock has averaged nearly 34% annual growth over the past two decades and risen 62% over the past year.

Still, there are risks, including competition with other entities. Merck, for example, is developing drugs to tackle hepatitis-C. Effective alternatives might force Gilead to cut its prices -- though competitors might alternatively price their own products high. Another interesting wrinkle is that steep price aside, Sovaldi is, for many patients, not a treatment but a cure­ -- meaning that Gilead won't be able to sell to them for long.

Overall, Gilead is a compelling opportunity, with strong Sovaldi sales appearing to be just the beginning. The company has many more potential winners in its pipeline, including some tackling cancer and HIV.

A closer look at Celgene Corporation
Celgene has been a whopper of a performer for shareholders, rising 48% over the past year and averaging annual growth of 33% over the past 20 years.

Its anemia drug, Revlimid, is a blockbuster, expected to generate about $5 billion in sales this year, and potentially $11 billion by 2021. Celgene is aiming to boost its sales by expanding its applications. Celgene isn't a one-trick pony, either. Its new multiple myeloma therapy, Pomalyst, enjoyed sales of $305 million last year and $136 million in the recent first quarter. Its Abraxane drug, which treats metastatic breast cancer, pancreatic cancer, and non-small-cell lung cancer, has also been selling well and winning approvals abroad. Its sales grew by about 50% year over year in the first quarter, and it's expected to generate close to $900 million this year. Celgene's psoriatic arthritis drug, Otezla, received FDA approval this year. Celgene expects an FDA decision in September regarding approval for Otezla to treat the larger indication of plaque psoriasis -- which affects some 3% of the population. Otezla is expected to ultimately generate more than $1 billion.

But wait -- there's more! Celgene is investing heavily in other companies with promising early-stage drugs, a move that could pay off handsomely in many years, not months. As my colleague Stephen Simpson has noted, Celgene has "a deep early stage pipeline of oncology drugs" and "meaningful label expansion opportunities for approved drugs."

Celgene does have some risks, though, such as a patent challenge to its Revlimid. But the dust hasn't settled on that yet, and the company has many other irons in the fire, too.

Despite all its growth, Celgene appears to be undervalued, with its forward P/E ratio near 19. It offers no dividend at this point but has been spending a lot on share repurchases. It has also long been spending money acquiring other companies, and with more than $5 billion in cash and free cash flow topping $2 billion annually, it's well positioned to keep making smart purchases. Some have suggested it would be a great acquisition for a large pharmaceutical company.

The big picture
It makes sense to consider adding some health care and biotech stocks to your portfolio. You can do so easily via an ETF. Alternatively, you might simply investigate an ETF focused on health care and biotech stocks and then cherry-pick from its holdings after doing some research on your own.