Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you're intrigued by volatile, high-beta stocks that often perform well in booming markets and you expect the stock market to grow briskly in the coming years, the PowerShares S&P 500 High Beta ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The PowerShares ETF's expense ratio -- its annual fee -- is a very low 0.25%. The fund is rather small, too, so if you're thinking of buying, beware of occasionally large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.
This ETF doesn't have much of a performance to assess, as it's extremely young. Year-to-date, it's ahead of the S&P 500, but 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 high-beta stocks had strong performances over the past year. Goodyear Tire & Rubber
Other companies didn't do as well last year, but could see turnarounds in the years to come. Cliffs Natural Resources
Optical networker JDS Uniphase
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.