Exchange-traded funds, or ETFs, offer a convenient way to invest in sectors or niches that interest you. If you expect the real estate industry to thrive over time because they're not making more land, the iShares Dow Jones US Real Estate ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The iShares ETF's expense ratio -- its annual fee -- is a relatively low 0.47%.
This ETF has performed rather well; on average, it beat the S&P 500 handily over the past 10 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 17%, 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. American Capital Agency
Other companies didn't add as much to the ETF's returns last year, but could have an effect in the years to come. Annaly Capital
The big picture
Demand for real estate 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 Annaly Capital Management, 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 Annaly Capital Management. Motley Fool newsletter services have recommended buying shares of Health Care REIT.
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