Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to invest in a bunch of midsize companies because they tend to be more proven performers than small caps and can grow more rapidly than large caps, the Rydex Russell Mid Cap Equal Weight ETF (NYSE: EWRM) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The Rydex ETF's expense ratio -- its annual fee -- is a relatively low 0.40%.

This ETF doesn't have much of a performance record yet, as it's still less than a year old. It's very small, too, so if you're thinking of buying, beware of occasionally large spreads between its bid and ask prices. You might want to just keep an eye on it as it matures a bit, or you might want to be an early investor. Remember that as with most investments, 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 stocks that this ETF follows did very well over the past year. Whole Foods Market (Nasdaq: WFM) surged 46%, posting an impressive double-digit revenue gain, paying down much debt, and enjoying higher gross margins than its peers. Dean Foods (NYSE: DF) gained 11% in a year in which it paid $131 million to settle a milk-price-fixing lawsuit and saw its cost of goods rise. The company has been busy paying down debt, which will boost its financial health, but its fortunes are still to some degree tied to fluctuating dairy prices and variable demand.

Clorox (NYSE: CLX) also gained 11% over the past year, also pressured by rising raw-material costs. It has been able to offset that some via price hikes for its offerings. The company also successfully avoided a takeover by Carl Icahn and offers a hefty dividend, recently yielding 3.5%.

Other companies didn't do as well but could bounce back in the years to come. SUPERVALU (NYSE: SVU) shed about 1% over the year, dropping 11% in a single day just last week, after reporting earnings that disappointed Wall Street. Still, the company is generating free cash flow and is paying down debt.

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.

Learn about the five ETFs that could soar in 2012. And if you're looking for some great investments beyond ETFs, consider these 12 dividend stocks for 2012.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.