Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect networking companies to thrive over time as our growing population and developing economies demand more communication services, the PowerShares Dynamic Networking Portfolio ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The PowerShares ETF's expense ratio -- its annual fee -- is 0.63%. The fund is fairly small, too, 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.
What's in it?
More than a handful of networking-related companies had strong performances over the past year. Brocade Communications
Network equipment specialist Ciena
Other companies didn't do as well last year, but could see their fortunes change in the coming years. Fiber-optics component maker Finisar
The big picture
Demand for networking 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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