Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the oil and gas industry to keep generating profits as our global economy keeps demanding its energy, the iShares Dow Jones U.S. Energy ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The energy ETF's expense ratio -- its annual fee -- is a relatively low 0.47%.
This ETF has performed well, beating the S&P 500 handily over the past 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 an ultra-low turnover rate of 6%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
This ETF's components were a mixed bag when it came to performance in 2011. Marathon Petroleum
Falling 38% was Transocean
The big picture
Demand for energy 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 Berkshire Hathaway and Chesapeake Energy, 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 Transocean and Berkshire Hathaway. Motley Fool newsletter services have recommended buying shares of Chesapeake Energy 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.