Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the materials sector to thrive as our global economy eventually recovers and heats up, fueling construction and manufacturing growth and infrastructure work, the Materials Select Sector SPDR ETF
ETFs often sport lower expense ratios than their mutual fund cousins. This materials ETF's expense ratio -- its annual fee -- is an ultra-low 0.20%.
This ETF has performed rather well, beating the S&P 500 over the past three, five, and 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 14%, 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 contributions to its performance over the past year. Seed-and-herbicide giant Monsanto
Other companies didn't add as much to the ETF's returns last year, but could have an effect in the years to come. Cliffs Natural Resources
The big picture
Demand for basic materials 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.