Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect regional banks to do well because of persistent low interest rates and their generally more conservative lending nature, the SPDR KBW Regional Banking ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The bank ETF's expense ratio -- its annual fee -- is a relatively low 0.35%.
Obviously, the banking swoon has made this ETF perform pretty badly over the past five years, with an average annual loss of 13.7%. 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. Pinnacle Financial Partners
Other companies have held back the ETF's returns in the past year, but could have a more positive effect in the years to come. Associated Banc-Corp
The big picture
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 ."
Longtime Fool contributor Selena Maranjian owns shares of JPMorgan Chase, 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 Bank of America, Citigroup, and JPMorgan Chase. The Fool owns shares of and has created a ratio put spread position on Wells Fargo. 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.