Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect telecommunications companies to thrive in the coming years, the iShares Dow Jones U.S. Telecom ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The telecom ETF's expense ratio -- its annual fee -- is a relatively low 0.48%.
This ETF doesn't have the most impressive performance record, beating the S&P 500 over the past three years, but trailing it over the past five and 10 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 relatively low turnover rate of 29%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
Several of this ETF's components made strong contributions to its performance over the past year. Level 3 Communications
Other companies didn't add as much to the ETF's returns last year, but could have an effect in the years to come. Frontier Communications
The big picture
Demand for telecommunications 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.
ETFs can help you find the way to better investing results. To find some great ETF investing ideas, take a look at The Motley Fool's special free report, " 3 ETFs Set to Soar During the Recovery ."