Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you think there's money to be made in focusing on companies where insiders have been snapping up shares, the Guggenheim Insider Sentiment ETF (NYSE: NFO) 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 Insider ETF's expense ratio -- its annual fee -- is 0.60%, which is a bit higher than many ETFs, but stil far lower than the typical stock mutual fund.

This ETF has performed reasonably well, outperforming the S&P 500 (INDEX: ^GSPC) handily over the past three and five years, on average. 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 65%, this fund does a fair amount of trading, although it isn't frantically and frequently rejiggering its holdings as many funds do. The turnover simply reflects the changing purchases of insiders.

What's in it?
Several of this ETF's components made strong contributions to its performance over the past year. Internet advertising concern ValueClick (Nasdaq: VCLK) gained about 23%, posting strong growth in earnings and robust projections. Some see it as a promising acquisition candidate as well. Food safety company Neogen (Nasdaq: NEOG) advanced 11%, is expanding its operations in China and Brazil, and is profiting from a marketing agreement with DuPont (NYSE: DD).

Other companies didn't add as much to the ETF's returns last year but could have an effect in the years to come. Prepaid-bank-card issuer NetSpend Holdings (Nasdaq: NTSP) shrank by 56%, and while some are optimistic that economically troubled consumers will turn more to prepaid cards, others worry about the company's share dilution and not-rapidly-rising cash flow from 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. 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.