Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you believe that there's good money to be made in junk bonds, the SPDR Barclays Capital High Yield Bond (NYSE: JNK) ETF could save you a lot of trouble. Instead of trying to figure out which bonds or which stocks will perform best, ETFs permit you to invest in a bunch of investments of interest all at once.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The junk bond ETF's expense ratio -- its annual fee -- is a relatively low 0.40%.

The appeal of junk bonds is that since they're issued by companies in relatively shaky condition, the companies have to offer generous interest rates to compensate for their risk. The risk of default very much remains, though, which is why they're commonly referred to as junk bonds.

This ETF has performed reasonably, but it's also very young. It lost much more than the overall bond market in 2008, but then it roared back in 2009 and has been outperforming the overall bond market since. 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.

What's in it?
It's instructive to peer into the holdings of an ETF like this for several reasons. As a would-be investor in the ETF, you should know what kinds of holdings it has. Its components also serve to remind us about which companies have been struggling and have raised money by lending at high rates. Since the ETF's managers are aiming to not lose money on the bonds they choose, they're effectively delivering a vote of confidence to their components' issuers.

The SPDR Barclays Capital High Yield Bond ETF's top holdings include Citigroup (NYSE: C) securities, with a 7% coupon rate and 7.6% yield to maturity, and Ford (NYSE: F) securities, with a 7.5% coupon and 4.3% yield.

Citigroup got clobbered in the 2008 financial crisis and has been struggling to turn itself around. How successful it will be remains very uncertain. Ford, meanwhile, has been posting some great numbers, such as net income up 22% in its last quarter, partly on the strength of its fuel-efficient hybrids.

The big picture
A well-chosen ETF can grant you instant diversification across an industry or investment category of interest -- and can 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 ."

Longtime Fool contributor Selena Maranjian owns shares of Ford but holds no other position in any company mentioned. Check out her holdings and a short bio. The Motley Fool owns shares of, and Motley Fool newsletter services have recommended buying shares of, Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.