Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the biotech industry to thrive as scientists develop more drugs to treat our aging population, the iShares Nasdaq Biotechnology ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The biotech ETF's expense ratio -- its annual fee -- is a relatively low 0.48%.
This ETF has a bit of a mixed performance record, slightly behind 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. Seattle Genetics
Other companies didn't add as much to the ETF's returns last year, but could have an effect in the years to come. Teva Pharmaceutical
The big picture
Demand for new medicines 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 owns shares of Teva Pharmaceutical Industries, but she holds no other position in any company mentioned. Click here to see her holdings and a short bio. The Motley Fool owns shares of Dendreon and Teva Pharmaceutical. Motley Fool newsletter services have recommended buying shares of Teva Pharmaceutical and Vertex Pharmaceuticals. 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.