Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect global industry to thrive amid an economic rebound, the Industrial Select Sector SPDR (NYSE: XLI) 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 Industrial ETF's expense ratio -- its annual fee -- is a very low 0.20%.

This ETF has topped the S&P 500 over the past five and 10 years, and with the global economy on the verge of recovery, many expect industrials to pick up steam. 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 very low turnover rate of 9%, 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 market-beating performance over the past year (up 28% in 2010, and about 5% so far this year). Caterpillar (NYSE: CAT) advanced about 70% over the past year, leaving investors excited about its purchase of surface-mining equipment maker Bucyrus (Nasdaq: BUCY).

United Parcel Service (NYSE: UPS) gained a more modest 22%, but it stands to get more business as economies revive and goods start flowing faster. It's also profiting from many money-saving environmental initiatives.

General Electric (NYSE: GE) has risen 23% amid its $30 billion spending spree, beefing up its industrial businesses in pipes, oil and gas equipment, appliances, electric cars, and more.

Other companies didn't add as much to the ETF's returns last year, but they could have an effect in the years to come. Boeing (NYSE: BA), for instance, seems to finally be close to releasing its Dreamliner, and has received some big new orders, such a $30 billion to build airborne refuelers for the Air Force.

The ETF holds almost 60 different securities, but it has nearly 12% of its assets in one company, General Electric. It also sports a 1.6% dividend yield.

The big picture
Demand for industrial equipment 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 does not own shares of any companies mentioned in this article. The Fool owns shares of United Parcel Service. Try any of our investing newsletter services free for 30 days. The Motley Fool is Fools writing for Fools.