Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect banks and financial services companies to get their acts together and thrive in the years ahead, the Vanguard Financials ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The financial ETF's expense ratio -- its annual fee -- is a low 0.27%.
This ETF has performed, well, dismally in recent years, lagging the S&P 500 considerably over the past five years. But it's still relatively young, and the future matters more than the past. 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 10%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
Few of this ETF's components have made strong contributions to its performance so far this year, but Annaly Capital Management
Buffett's Berkshire Hathaway
Other companies truly hurt the ETF's 2011 returns. Aflac
The big picture
Demand for financial services 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 Aflac, Berkshire Hathaway, Annaly Capital Management, and Bank of America. Motley Fool newsletter services have recommended buying shares of Aflac and Berkshire Hathaway. 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.
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