Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the aerospace and defense industry to thrive, given the strife and upheaval around the world, the iShares Dow Jones US Aerospace & Defense ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The iShares ETF's expense ratio -- its annual fee -- is a relatively low 0.47%.
This ETF is only a few years old, so it doesn't have much of a track record yet. So far, it has generally posted returns slightly better than the overall market. 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 14%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do. (It tracks the benchmark Dow Jones U.S. Select Aerospace & Defense Index.)
What's in it?
Several of this ETF's components made strong contributions to its performance over the past year. Textron
Other companies didn't add much to the ETF's returns last year, but they could have an effect in the years to come. L-3 Communications
The ETF holds 32 different securities, with its top two, United Technologies
The big picture
Demand for defense and aerospace offerings 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."