Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the pharmaceutical industry to thrive over time as our global population grows and ages, the iShares Dow Jones US Pharmaceuticals 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 0.47%.
This ETF has performed rather well, beating the world market handily 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 18%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
More than a handful of pharmaceutical companies had strong performances over the past year. VIVUS
Botox maker Allergan
Other companies didn't do as well last year, but could see their fortunes change in the coming years. As of a few days ago, Questcor Pharmaceuticals
The big picture
Demand for medications 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.
The pharmaceutical industry is an ever-changing space. To help you keep up with it, one of The Motley Fool's top biotech analysts has created a new premium report on a high-flying pharmaceutical company -- Arena Pharmaceuticals. The report covers Arena's key opportunities and risks and comes with a full year of analyst updates. Click here to get your copy.
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 has a disclosure policy.