Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the energy industry to thrive as our global demand for power continues to grow, the Vanguard Energy ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The energy ETF's expense ratio -- its annual fee -- is a very low 0.19%.
This ETF has performed rather well, beating the S&P 500 over the past 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.
With a low turnover rate of 11%, 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 strong contributions to its performance over the past year. Natural gas specialist Spectra Energy
Other companies didn't add as much to the ETF's returns last year, but could have an effect in the years to come. Chesapeake Energy
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.