Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect utilities in America to grow over time as our population grows and with it, our demand for power, the iShares Dow Jones US Utilities 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 over the long run, beating the S&P 500 over the past five and 10 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 very low turnover rate of 8%, 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. Spectra Energy
Other companies didn't add quite as much to the ETF's returns last year but could have an effect in the years to come. Duke Energy, up 18% over the past year, aims to merge with Progress Energy
The big picture
Demand for energy 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.