Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the oil equipment industry to thrive, the iShares Dow Jones US Oil Equipment Index ETF (NYSE: IEZ) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The iShares ETF's expense ratio -- its annual fee -- is a relatively low 0.47%.

This ETF has performed reasonably, outperforming the S&P 500 handily over the past year 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 relatively low turnover rate of 30%, 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. National Oilwell Varco (NYSE: NOV) gained about 54% over the past year. Its massive size and diverse offerings have helped the company find success as a one-stop shop for many of its customers. Like its peers, NOV stands to gain from big discoveries by Petrobras (NYSE: PBR) and BP (NYSE: BP), which will require rigs and more.

CARBO Ceramics (NYSE: CRR) gained about 80% as it delivers materials used in the controversial practice of fracking. Its customers engaged in blasting underground rock formations to release trapped oil and natural gas include Halliburton (NYSE: HAL) and Schlumberger. Halliburton in particular claims that nearly 90% of onshore rigs require fracking.

Other companies didn't add as much to the ETF's returns last year, but could have an effect in the years to come. McDermott International (NYSE: MDR), for example, shed about 2% over the past year, recently posting disappointing earnings. Its CEO notes that it has $800 million in bookings and a strong balance sheet.

The big picture
Demand for oil 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. For more great ETF investing ideas, take a look at The Motley Fool's special free report, " 3 ETFs Set to Soar During the Recovery ."