Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add some promising small-cap companies to your portfolio because of their great growth potential, the iShares Morningstar Small Growth Index 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 0.30%. 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 performed rather well, beating the large-cap-heavy 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?
More than a handful of small-cap growers had strong performances over the past year. Semiconductor chip designer Cirrus Logic
Natural-gas specialist Cheniere Energy
Real estate investment trust Omega Healthcare
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.
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