Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the retail industry to grow as our global economy eventually recovers, the PowerShares Dynamic Retail ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The retail ETF's expense ratio -- its annual fee -- is a reasonable 0.63%.
This ETF has performed rather well, beating the S&P 500, on average, over the past three and five 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.
What's in it?
Several of this ETF's components made strong contributions to its performance this year. Beleaguered drugstore chain Rite-Aid
Other companies didn't add as much to the ETF's returns last year, but could have an effect in the years to come. Walgreen, for instance, shed about 11%, selling its own PBM business for a lot of cash but also worrying investors by ending its dealings with Express Scripts.
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.