Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the telecommunication industry to thrive over time as our planet's growing and developing population demands more and more communication tools and services, the SPDR S&P Telecom ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The SPDR ETF's expense ratio -- its annual fee -- is a relatively low 0.35%. The fund is very 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 doesn't have enough of a performance track record to assess, as it's extremely young. You can get a sense of its potential, though, by assessing the kinds of companies it invests in. 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?
More than a handful of telecom companies had strong performances over the past year. Brocade Communications
Other companies didn't do as well last year, but could see their fortunes change in the coming years. Wireless broadband provider Clearwire
Landline and rural specialist Windstream
The big picture
Demand for telecommunication products and services isn't going away any time 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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Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter, owns shares of Verizon Communications and Windstream, but she holds no other position in any company mentioned. Click here to see her holdings and a short bio. The Motley Fool has a disclosure policy.