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
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
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
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 ."
Longtime Fool contributor Selena Maranjian holds no position in any company mentioned. Click here to see her holdings and a short bio. The Motley Fool owns shares of Schlumberger, Petrobras, and National Oilwell Varco. Motley Fool newsletter services have recommended buying shares of Petrobras and National Oilwell Varco. 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.