Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If the recent massive Gulf oil spill made you want to look into alternative energies such as nuclear power, the Market Vectors Uranium+Nuclear Energy (NYSE: NLR) 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 many of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The Market Vectors ETF's expense ratio is no exception. Its annual fee of 0.63%, while higher than that of many ETFs, remains well below the typical mutual fund rate.

This ETF has performed reasonably, but it's also very young, with just a few years on the books. It has gained about 30% over the past year, and averaged 27% over the past two. 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 turnover rate of 45%, 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. Chief among these were uranium specialists, such as Canadian giant Cameco (NYSE: CCJ) and smaller player Denison Mines (AMEX: DNN), up 54% and 204%, respectively. Uranium investments have been on fire lately, with Uranium Resources (Nasdaq: URRE) up more than fourfold over the past year. My colleague Mike Pienciak thinks that uranium's glory days are not over; he named it "the must-have commodity" for 2011.

Other companies didn't add much to the ETF's returns last year, but could have an effect in the years to come. Exelon (NYSE: EXC), America's biggest nuclear power company, is also expanding into other energy sources such as wind power.

The ETF holds about 22 different securities, with about a quarter of its assets divided between Cameco, Exelon, and Constellation Energy (NYSE: CEG). The latter pursues not only nuclear energy, but also fossil fuels and renewable energies.

Best of all, this ETF offers a substantial distribution yield of around 4%. So while you wait for nuclear players to outperform, you can expect to get a healthy dose of income every year.

The big picture
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."

Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article. The Fool owns shares of Exelon, which is a Motley Fool Inside Value pick.  Try any of our investing newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is Fools writing for Fools.