Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the agricultural industry to thrive over time as the world's population keeps growing, the Market Vectors Agribusiness ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The Agribusiness ETF's expense ratio -- its annual fee -- is a relatively low 0.56%.
This ETF has lagged the S&P 500 a bit, on average, over the past three years, and it's ahead of it a bit so far this year. 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 22%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
Several agricultural companies had strong performances over the past year. Monsanto
Other companies didn't do as well last year but could see their fortunes change in years to come. Fertilizer companies fall in this category, with PotashCorp
Farming equipment giant Deere
The big picture
Demand for food is likely to stay with us -- and grow over time. 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.