Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the semiconductor industry to thrive as our society's electronics needs drive demand, the Market Vectors Semiconductor ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The semiconductor ETF's expense ratio -- its annual fee -- is a relatively low 0.35%. The fund is smallish, 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 reasonably well, beating the world market index so far this year, but it's also very young, born just this past December. As with most investments, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.
What's in it?
Several semiconductor companies had strong performances over the past year, but many have languished, waiting for the economic recovery to gain steam. Semiconductors are, after all, a very cyclical business.
Among the companies that didn't do as well last year, Atmel
The big picture
Demand for semiconductors 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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