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.