Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect undervalued stocks to grow, approaching or exceeding their intrinsic worth, the Vanguard Value ETF (NYSE: VTV) 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 Vanguard ETF's expense ratio -- its annual fee -- is a very low 0.12%, which is typical of Vanguard funds.

This ETF hasn't performed as well as many would hope, trailing the S&P 500 and the typical large-value fund over the past 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 low turnover rate of 27%, 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. Tobacco giant Altria (NYSE: MO), for example, gained about 18% despite challenges from high unemployment, a weak economy, and coming changes requiring new graphic warning labels on its wares. Its domestic rivals, Lorillard (NYSE: LO) and Reynolds American (NYSE: RAI), face the same issues, and that has many tobacco investors favoring Philip Morris International (NYSE: PM), which has already been dealing with heavy regulation in some markets and serves areas where smoking is growing more briskly. Still, Altria offers an attractive dividend and solid earnings.

Other companies didn't add as much to the ETF's returns last year, but could have an effect in the years to come. Freeport McMoRan Copper & Gold (NYSE: FCX), for instance, shed about 30% over the past year, partly because of strikes at an Indonesian facility with huge copper and gold reserves. Bulls feel the stock has been overly punished and, given its significant assets, is due to rise. General Electric (NYSE: GE), meanwhile, shed about 6%, but its profits and revenue are rising, and it has been investing heavily in R&D, which bodes well for its future. It's also been beefing up its alternative energy operations.

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.

Learn about the best dividend ETFs. And if you're looking for some great investments beyond ETFs, consider these 10 Stocks for Your Retirement Portfolio.

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 Altria Group and Philip Morris International. Motley Fool newsletter services have recommended buying shares of Philip Morris International and creating a bear put ladder position in Lorillard. 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.