Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the steel industry to thrive as the global economy eventually starts cooking again, the Market Vectors Steel ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The steel ETF's expense ratio -- its annual fee -- is a fairly reasonable 0.55%.
This ETF doesn't have a stellar performance record, but it's also very young, with just four full years on the books. Its performance is largely tied to our recent recession, which has put a damper on construction and infrastructure work and led to huge volatility. 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 low turnover rate of 13%, 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. Cliffs Natural Resources
Brazil-based iron ore giant Vale
Other companies didn't add as much to the ETF's returns last year, but could have an effect in the years to come. U.S. Steel
Companhia Siderurgica Nacional
The big picture
Demand for steel 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.