Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the health-care industry to generate a lot of profits over the years as our population grows and ages, the PowerShares Dynamic Healthcare ETF
It's referred to by some as an "enhanced" index fund, tracking the Dynamic Healthcare Intellidex Index. The index looks at a variety of measures to select health-care stocks that seem to have the most potential.
ETFs often sport lower expense ratios than their mutual fund cousins. This ETF's expense ratio -- its annual fee -- is a relatively low 0.60%.
The ETF has performed reasonably, having outperformed the S&P 500 over the past five years, on average, and the ETF is ahead of the index so far this year as well. 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.
What's in it?
Several of this ETF's components made strong contributions to its performance this year. Spectrum Pharmaceuticals
Other companies didn't add as much to the ETF's returns this year, but could have an effect in the years to come. Medical insurance specialist CorVel
The big picture
Demand for health-care products and 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.