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
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
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
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.