Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you want to invest in socially responsible companies, the iShares MSCI USA ESG Select Social ETF
The fund tracks the MSCI USA ESG Select Social Index, which screens for companies with good records on environmental, social, and governance ("ESG") issues relative to their peers and the overall market. It then weights them in the index according to how strong their scores are.
ETFs often sport lower expense ratios than their mutual fund cousins. The iShares ETF's expense ratio -- its annual fee -- is a relatively low 0.50%. The fund is fairly 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 has, overall, roughly kept pace with the S&P 500 over the past three and five years. 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 companies that pass various socially responsible investing screens had strong performances over the past year. Apple
Other companies didn't do as well last year, but could see their fortunes change in the coming years. Commercial power system specialist Eaton
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.
If you're interested in some of the industries above, such as health care, energy, and industrial equipment, you might want to consider making some investments before the upcoming Presidential election. To learn about a few compelling contenders, check out our special free report, "These Stocks Could Skyrocket After the 2012 Presidential Election."
Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter, owns shares of Apple, but she holds no other position in any company mentioned. Click here to see her holdings and a short bio. The Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Becton, Spectra Energy, and Apple, as well as creating a bull call spread position in Apple. The Motley Fool has a disclosure policy.
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