Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the financial services industry to thrive as it emerges from recent years' scandals and reforms and as the global economy eventually heats up, the Financial Select Sector SPDR
ETFs often sport lower expense ratios than their mutual fund cousins. The financial ETF's expense ratio -- its annual fee -- is a very low 0.20%.
As you'd expect after the financial crisis, this ETF has not performed well in the recent past, outgunned by the S&P 500 over the past three, five, and 10 years. Still, the future is what matters, and banks are getting stronger again, and may deliver solid performances in coming years. Investors with conviction need to wait for their holdings to deliver.
With a low turnover rate of 16%, 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. American Express
Other companies didn't add as much to the ETF's returns last year, but could have an effect in the years to come. Berkshire Hathaway
The big picture
Demand for banking 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 owns shares of American Express and Berkshire Hathaway, but she holds no other position in any company mentioned. Click here to see her holdings and a short bio. The Motley Fool owns shares of AFLAC and Berkshire Hathaway. Motley Fool newsletter services have recommended buying shares of Berkshire Hathaway and AFLAC. 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.