Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you're drawn to small-cap companies because of their great growth potential, yet you also yearn for dividend income, the WisdomTree SmallCap Dividend ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The WisdomTree ETF's expense ratio -- its annual fee -- is a relatively low 0.38%.
This ETF has performed reasonably, but it's also very young, with just a few years on the books. It outperformed the S&P 500, on average, over the past three years, 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.
With a low turnover rate of 11%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
Several small dividend-paying companies had strong performances over the past year. TAL International Group
Other companies didn't do as well last year, but could see their fortunes change in the coming years. Prospect Capital
Government Properties Income Trust
The big picture
It's hard to argue against the value of owning small-caps and dividend payers in your portfolio. 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.