Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect medium-sized companies to grow over time, with many of them becoming large-cap companies, the Vanguard Mid-Cap Growth ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The Vanguard ETF's expense ratio -- its annual fee -- is a relatively low 0.12%.
This ETF has performed reasonably well, beating the S&P 500 (INDEX: ^GSPC) 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 turnover rate of 38%, 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. Up 87%, Green Mountain Coffee Roasters
Other companies didn't add as much to the ETF's returns last year, but could have an effect in the years to come. Genetic sequencer maker Illumina
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.
Longtime Fool contributor Selena Maranjian owns shares of Starbucks, 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 Starbucks. Motley Fool newsletter services have recommended buying shares of Green Mountain, Illumina, Vertex Pharmaceuticals, Pacific Biosciences, and Starbucks, as well as creating a lurking gator position in Green Mountain. 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.