Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the biotech industry to thrive as it develops new treatments for all kinds of health problems, the SPDR S&P Biotech
The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The biotech ETF's expense ratio -- its annual fee -- is a relatively low 0.35%.
This ETF has performed well, beating the overall market handily over the past three and five years. As with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.
What's in it?
Several of this ETF's components made strong contributions to its performance over the past year. ARIAD Pharmaceuticals
Other companies didn't add to the ETF's returns last year but could have an effect in the years to come. Dendreon
The big picture
Demand for biotechnology 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.