Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the networking industry to thrive over time as our demand for communication services keeps increasing, the iShares S&P North American Technology-Multimedia Networking Index Fund ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The iShares ETF's expense ratio -- its annual fee -- is a relatively low 0.48%. The fund is fairly small, too, so if you're thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.
This ETF has a mixed performance record, slightly outperforming the world market over the past decade, but underperforming it 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 28%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
Several networking companies had strong performances over the past year. Brocade Communications
Other companies didn't do as well last year, but they could see their fortunes change in the coming years. Infrastructure supplier Riverbed Technology
The big picture
Demand for networking products and services 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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