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 as global wars, military operations, and air travel continue, the iShares Dow Jones US Aerospace & Defense
ETFs often sport lower expense ratios than their mutual fund cousins. The aerospace and defense ETF's expense ratio -- its annual fee -- is a reasonably low 0.47%.
This ETF has performed reasonably well, beating the market over the past three and five years. 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.
What's in it?
Several of this ETF's components made strong contributions to its performance over the past year. Precision Castparts
Other companies didn't add quite as much to the ETF's returns last year, but could have a strong effect in the years to come. Boeing
The big picture
Demand for aerospace and defense 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 ."
Longtime Fool contributor Selena Maranjian holds no position in any company mentioned. Click here to see her holdings and a short bio. The Motley Fool owns shares of Lockheed Martin. Motley Fool newsletter services have recommended buying shares of Precision Castparts. 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.