Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the energy industry to thrive due to our world's insatiable and growing demand for energy, the Energy Select Sector SPDR ETF
The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The energy ETF's expense ratio -- its annual fee -- is a very low 0.20%.
This ETF has performed rather well over the long term, beating the S&P 500 handily over the past five and 10 years, on average. 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 8%, 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. Chesapeake Energy
Other companies didn't add quite as much to the ETF's returns last year, but could have an effect in the years to come. Occidental Petroleum
The big picture
Demand for energy isn't going away anytime soon. A well-chosen ETF can grant you instant diversification across any industry or group of companies -- and make investing in and profiting from it 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 ."