Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the medical devices industry to thrive as the world's growing population ages, the iShares Dow Jones US Medical Devices (NYSE: IHI) ETF could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in several dozen of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The Medical Devices ETF's expense ratio -- its annual fee -- is a relatively low 0.47%.

This ETF has performed reasonably, but it's also very young, with just four years on the books. It underperformed its category in 2008 and 2010, though it beat it substantially in 2007 and 2009. 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. With a low turnover rate of 25%, 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. Sirona Dental Systems (Nasdaq: SIRO) sports a one-year 28% gain, with investors bullish about its laser-based and robotic dental equipment. ResMed (NYSE: RMD) gained 23%, selling equipment to treat sleep apnea, a condition that's more common in older people.

Other companies didn't add much to the ETF's returns last year, but could have an effect in the years to come. Intuitive Surgical (Nasdaq: ISRG), for instance, lost a little ground over the past year, but has a three-year average annual revenue growth rate of nearly 30%, as hospitals continue to snap up its robotic surgery equipment.

The ETF holds about 40 different securities, and nearly 12% of its assets are in one company, Medtronic (NYSE: MDT). But Medtronic is the 800-pound gorilla in this industry, with nearly twice the market cap of No. 2 Stryker. Medtronic also appears to be out-innovating its peers, with 60 new products expected over the coming two years.

The big picture
Demand for medical devices isn't going away anytime soon. A well-chosen ETF can grant you instant diversification across the industry -- and make investing in and profiting from the sector 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."

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Selena Maranjian owns shares of Intuitive Surgical and Medtronic. Stryker is a Motley Fool Inside Value pick. Intuitive Surgical is a Motley Fool Rule Breakers recommendation. The Fool owns shares of Medtronic. Try any of our investing newsletter services free for 30 days. The Motley Fool is Fools writing for Fools.