Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the insurance industry to thrive as our population grows and more people need more protection, the SPDR KBW Insurance ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The insurance ETF's expense ratio -- its annual fee -- is a relatively low 0.35%.
This ETF has not performed very impressively, lagging the S&P considerably over the past five years. But 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. Low interest rates have held many insurers back, while property insurers have taken hits when disasters such as Hurricane Irene have struck, as investors get skittish about blows to insurers' earnings. Still, strong insurers plan for occasional disasters, and many of this ETF's holdings seem attractive, sporting P/E ratios below 10.
With a low turnover rate of 9%, 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. Fidelity National Financial
Other companies didn't add as much to the ETF's returns last year but could have an effect in the years to come. Hartford Financial Group
The big picture
Demand for insurance 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 ."
Longtime Fool contributor Selena Maranjian holds no position in any company mentioned. Check out her holdings and a short bio. The Motley Fool owns shares of Fidelity National Financial. Motley Fool newsletter services have recommended buying shares of Fidelity National Financial. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.