Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the transportation sector to thrive over time, especially as the global economy gets back on its feet, the SPDR S&P Transportation ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The transportation ETF's expense ratio -- its annual fee -- is a low 0.35%. The fund is small, 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 is too young to have a sufficient track record to assess. And, regardless, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.
With a low turnover rate of 19%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
Several transportation companies had strong performances over the past year. United Parcel Service
Other companies didn't do as well last year, but could see their fortunes change in the coming years. The railroad company CSX
C. H. Robinson Worldwide
The big picture
Demand for transportation 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.
If the rising cost of fuel has you down, consider checking out these three companies that our team at Stock Advisor feels will outperform when oil prices are high.