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 (NYSE: SPHB) 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 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 (NYSE: GT) gained 12%, suffering some after management warned that it expects some softness in the market in 2012. Still, the company has been turning itself around robustly, with overall revenue growing by double digits and per-tire revenue growing by 18% over the past year.

Other companies didn't do as well last year, but could see turnarounds in the years to come. Cliffs Natural Resources (NYSE: CLF), for instance, shrank by 11%. The company recently reported volume and iron ore pricing below expectations, but it still seems like an attractively priced stock, destined eventually to benefit from a global economic recovery. Meanwhile, U.S. Steel (NYSE: X), which uses iron ore to make steel, sank 46%, as investors worry about a soft market. It has been posting operating losses in recent years, but at least those losses have been shrinking.

Optical networker JDS Uniphase (Nasdaq: JDSU), down 44%, has been posting improving profit margins and enjoys diversified operations, but it's also heavily dependent on a particular contract manufacturing supplier. Still, some are quite bullish on it.

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 5 ETFs That Could Soar in 2012. And if you're looking for some great investments beyond ETFs, consider these 12 Dividend Stocks for 2012.