Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect a rising global population to drive greater demand for food, the Market Vectors Agribusiness ETF (NYSE: MOO) 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. At 0.56%, the Agribusiness ETF's expense ratio -- its annual fee -- isn't the lowest in the business, but it's still less than what a lot of mutual funds charge.

This ETF has performed reasonably well, but it's also very young, with just three full years on the books. It underperformed the market in 2008, and beat it substantially in 2009 and 2010. 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 20%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.

What's in it?
Several of this ETF's 46 components made strong contributions to its performance over the past year. Chemical & Mining Co. of Chile (NYSE: SQM), for example, gained 62%, and has many investors bullish about how this major producer of fertilizer minerals and lithium will benefit from lithium batteries' proliferation. (It also produces fertilizers.) Meanwhile, PotashCorp (NYSE: POT), the world's largest fertilizer company, gained 59% and stands to benefit over the long run as world demand for food rises along with population growth. Fellow fertilizer company Mosaic (NYSE: MOS) gained 43%, but some are worried that fertilizer companies may have gotten ahead of themselves.

Other companies didn't add as much to the ETF's returns over the past year, but could have a positive effect in the years to come. Monsanto (NYSE: MON), for example, only gained 5% as its Roundup insecticide sales faltered in the face of generic competition. Still, it's a giant in the seed business, which is likely to keep growing. Tyson Foods (NYSE: TSN) lost 3%, but seems undervalued today. Japan's recent disasters have hurt its poultry industry, so Tyson may be able to gain business there. 

The big picture
Demand for agricultural products 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.

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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. Motley Fool Options has recommended a synthetic long position on Monsanto. Try any of our Foolish 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 has a disclosure policy.