Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the materials industry to thrive over time as we keep building and repairing, the Guggenheim S&P 500 Equal Weight Materials ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The Guggenheim ETF's expense ratio -- its annual fee -- is a relatively low 0.50%. The fund is fairly small, though, so if you're thinking of buying, beware of occasionally 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 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 21%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
More than a handful of materials companies had strong performances over the past year. Sherwin-Williams
Seed and herbicide giant Monsanto
Freeport McMoRan Copper & Gold
Other companies didn't do as well last year, but could see their fortunes change in the coming years. Mosaic
The big picture
Demand for basic materials 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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