Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the global-materials industry to thrive as the world economies recover and building and growing activities heat up, the iShares S&P Global Materials (NYSE: MXI) 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 more than a hundred of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The ETF's expense ratio -- its annual fee -- is a relatively low 0.48%.

This ETF has performed reasonably, but it's also very young, with just a few years on the books. It outperformed the market in 2007, 2009, and 2010 and underperformed in 2008. 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. With a very low turnover rate of 4%, 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. PotashCorp (NYSE: POT), the fertilizer giant, roughly doubled in value, as investors expect farmers to keep needing to boost their yields with fertilizer. (Over the past five years, PotashCorp's revenue has grown at an average annual rate of almost 14%.) Freeport McMoRan Copper & Gold (NYSE: FCX) gained more than 80% on the strength of valuable metals. Global construction in developing nations and recovering nations such as Japan should keep copper and other metals in demand. Dow Chemical (NYSE: DOW) gained about 61%, with investors hopeful about its growing focus on higher-margin chemical specialties, thanks to its purchase of Rohm & Haas.

Other companies didn't add as much to the ETF's returns last year but could have an effect in the years to come. Gold specialists Barrick Gold (NYSE: ABX) and Newmont Mining (NYSE: NEM), for example, gained 8% and lost 6%, respectively, over the past year, as the surging price of gold took a breather. Barrick is more attractive to some because of its diversification into copper and silver.

The big picture
Demand for basic materials 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. Check out her holdings and a short bio. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.