Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the consumer staples industry to thrive over time, since consumers will always, by definition, need their staples, the Vanguard Consumer Staples Index Fund ETF (NYSE: VDC) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in a lot of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The Vanguard ETF's expense ratio -- its annual fee -- is a very low 0.19%. (Vanguard is known for low fees.) It yields about 2% in dividend, too.

This ETF has performed rather well, outperforming the world market 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.

With a low turnover rate of 7%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.

What's in it?
Several consumer staples companies had strong performances over the past year. Tobacco giants Altria (NYSE: MO) and Philip Morris International (NYSE: PM), for example, surged 45% and 43%, respectively. Altria is America's domestic tobacco titan, and though it faces a shrinking base of smokers and increased regulatory pressures and taxes, it does still offer investors a hefty dividend (recently yielding 4.7%) and rather steady cash flows. It also owns about 27% of SABMiller, one of the world's largest brewers, which provides nice diversification. Still, if you don't like the future of smoking in America, look at Philip Morris International, recently yielding 3.4% and operating outside the U.S., where many nations sport laxer regulations and developing nations are building bigger middle classes, who can better afford to smoke.

Food distribution titan Sysco (NYSE: SYY) advanced 14%. It has seen its growth slow recently, due in part to rising food prices and slowing restaurant traffic. Still, it's a dividend titan, and has been able to maintain its profit margins while cutting costs. The recent drought that's hiking corn prices isn't helping, though. In a recent conference call, management noted that acquisitions are expected to be "a big part of our arsenal."

Other companies didn't do as well last year, but could see their fortunes change in the coming years. Walgreen (NYSE: WAG), for example, was essentially flat, having lost millions of customers and billions of dollars when its partnership with Express Scripts fell apart. The two have finally abandoned legal proceedings, though, so there's hope of renewed cooperation, but Walgreen isn't likely to get back all it lost. Still, it's moving in promising directions, expanding into Europe, for example, which may pay off once Europe's financial health improves.

The big picture
Demand for consumer staples 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.

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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. The Motley Fool owns shares of Express Scripts. Motley Fool newsletter services have recommended buying shares of Express Scripts and SYSCO. The Motley Fool has a disclosure policy.

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