Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect stocks with low P/E ratios to do well as they gradually rise in value, approaching more reasonable P/E levels, the Russell Low P/E ETF (NYSE: LWPE) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The Low P/E ETF's expense ratio -- its annual fee -- is a relatively low 0.37%.

This ETF has performed... well, it's really too soon to say, as it only has a few months under its belt.

Note that the ETF is not only very young, but also very small. Thus, if you're thinking of buying in, make sure you don't get whacked by a wide spread. Alternatively, you might just add the ETF to your watchlist for future consideration, or peek into its holdings for some investment ideas.

What's in it?
Several of this ETF's components have posted solid gains over the past year. US Bancorp (NYSE: USB), for example, gained about 7%. It recently reported revenue up 5% and profits up 40%, and from its Minneapolis home, it's avoided some of the ire that Wall Street banks like Bank of America (NYSE: BAC) and JPMorgan Chase (NYSE: JPM) have earned in recent years.

Procter & Gamble (NYSE: PG), up 8%, has joined some of its peers in reducing prices in the face of our recent recession and in introducing new low-priced offerings.

Other companies haven't done quite as well but could have a positive effect on the ETF's returns in the years to come. General Electric (NYSE: GE), with P/E ratios below the overall market and its own five-year average, rose just 1% over the past year. But it holds much promise, with a variety of established, growing business lines, as well as newer initiatives such as solar power.

Hewlett-Packard (NYSE: HPQ), down about 34%, has disappointed many investors with its board of directors' behavior, and some are not excited about new CEO Meg Whitman. But its valuation is nevertheless compelling. Indeed, my colleague Anand Chokkavelu listed it as one of the market's 10 cheapest stocks.

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.

Learn about the best dividend ETFs. And if you're looking for some great investments beyond ETFs, consider these 10 Stocks for Your Retirement Portfolio.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.