Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect companies rated by analysts as strong buys to outperform their lesser-buy counterparts, the Guggenheim Raymond James SB-1 Equity ETF
The fund invests in companies rated as "Strong Buys" by Raymond James & Associates.
ETFs often sport lower expense ratios than their mutual fund cousins. The Guggenheim ETF's expense ratio -- its annual fee -- is 0.75%. That's a good bit higher than many ETFs, but still well below the typical stock mutual fund.
This ETF has performed rather well, but it's also very young, begun in 2006. It has outperformed the S&P 500 over the past three and five years, on average. 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?
Many of the companies this ETF has invested in have posted losses over the past year. Such drops likely influenced the Raymond James analysts' calls, as a price drop for an attractive company makes it even more attractive.
Optical networking component giant JDS Uniphase
Networking equipment maker Ciena
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.
Longtime Fool contributor Selena Maranjian holds no position in any company mentioned. Click here to see her holdings and a short bio. The Motley Fool owns shares of Transocean. 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.
More from The Motley Fool
You Need to Hear the SEC's Warning on Cryptocurrencies and ICOs
Before you invest in the next hot ICO, here's what you need to know.
Americans Say It Takes $2.4 Million to Be Wealthy. Here's How to Get There in Time for Retirement
Think you'll never be a millionaire? It's easier than you might expect.
Better Buy: Amazon.com, Inc. vs. Google
We pit these two market titans against each other to see which is the best investment today.