Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the insurance industry to thrive over time, the SPDR S&P Insurance ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The insurance ETF's expense ratio -- its annual fee -- is a relatively low 0.35%. 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 outperformed the world market over the past three years, but underperformed 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.
With a low turnover rate of 9%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
Several insurance companies had strong performances over the past year. Cincinnati Financial
Marsh & McLennan
Other companies didn't do as well last year, but could see their fortunes change in the coming years. Prudential
The big picture
Demand for insurance isn't going away anytime soon, because the risks we face aren't going away. 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.
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Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter, holds no position in any company mentioned. Click here to see her holdings and a short bio. Motley Fool newsletter services have recommended buying shares of AFLAC. The Motley Fool has a disclosure policy.