Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the biotech industry to thrive as our population grows and ages and more treatments are sought for various health conditions, the SPDR S&P Biotech
ETFs often sport lower expense ratios than their mutual fund cousins. The biotech ETF's expense ratio -- its annual fee -- is a relatively low 0.35%.
This ETF has performed reasonably well, lagging the S&P 500, on average, over the past three years, but beating it over the past five. 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?
Plenty of biotech companies had strong performances over the past year. Ariad Pharmaceuticals
Other companies didn't do as well last year, but could see their fortunes change in the coming years. Dendreon
Human Genome Sciences
The big picture
Demand for biotech products isn't going away anytime soon. 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.
Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter, owns shares of Johnson & Johnson, but she holds no other position in any company mentioned. Click here to see her holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Johnson & Johnson, Vertex Pharmaceuticals, and GlaxoSmithKline. Motley Fool newsletter services have recommended creating a diagonal call position in Johnson & Johnson. The Motley Fool has a disclosure policy.