Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect demand for water and water-related services to grow as our global population grows and economies develop, the PowerShares Water Resources ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The water ETF's expense ratio -- its annual fee -- is a reasonable 0.60%. That's a bit higher than many ETFs, but still far lower than most stock mutual funds.
This ETF actually doesn't have the most impressive record so far, but it's been around for only a few years, and the future matters more than the past. It outperformed the S&P 500
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. Deemed by some to be one of the best-run conglomerates, Danaher
Other companies didn't add as much to the ETF's returns last year but could have an effect in the years to come. Veolia Environnement
The big picture
Demand for clean water 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.
Longtime Fool contributor Selena Maranjian holds no position in any company mentioned. Check out his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Mueller Water Products. 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.