Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the utility industry to thrive over time as our growing population keeps requiring more and more power, the Utilities Select Sector SPDR ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The utilities ETF's expense ratio -- its annual fee -- is a very low 0.18%. It recently yielded around 3.7% in dividends as well.
This ETF has performed rather well, topping the world market over the past three, five, and 10 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 3%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
More than a few utility companies had strong performances over the past year. Electric specialist Entergy
Other companies didn't do as well last year but could see their fortunes change in the coming years. Exelon
Public Service Enterprise Group
The big picture
Demand for energy 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. Check out her holdings and a short bio. Motley Fool newsletter services have recommended buying shares of and writing a covered straddle position on Exelon.
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