Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the solar energy industry to perform well over the long run, once it recovers from its current slump, the Market Vectors Solar Energy ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The solar ETF's expense ratio -- its annual fee -- is a reasonable 0.65%.
This ETF has performed... well, poorly. But it's also very young, as is the industry itself, and has been clobbered by growing pains and bankruptcies as players jockey for position and deal with supply and demand imbalances. 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 turnover rate of 37%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
Just about none of this ETF's components did much to boost its performance over the past year. But it's all relative, of course. GT Advanced Technologies
Other companies really killed the ETF's returns last year, but could have a positive effect in the years to come. Power-One
The big picture
Demand for energy isn't going away anytime soon, and neither is sunshine. 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.