Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you want to balance your portfolio with medium-sized companies that still have room to grow, the Vanguard Mid-Cap ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The Vanguard ETF's expense ratio -- its annual fee -- is an ultra-low 0.12%.
This ETF has performed rather well, beating the S&P 500 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. 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. Shares of Netflix
Other companies didn't add as much to the ETF's returns last year, but they could have an effect in the years to come. Micron Technology
The big picture
A diversified portfolio, with large, small, and medium-sized companies, makes an effective investing strategy. A well-chosen ETF can grant you instant diversification across the industry -- and make investing in and profiting from the sector that much easier. Certain ETFs can even help you zero in on especially undervalued or fast-growing mid-caps.
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 ."