Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect companies focused on the rare-earth and strategic metals that are used in industry to prosper as the global economy picks up, the Market Vectors Rare Earth/Strategic Metals ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The rare-earth ETF's expense ratio -- its annual fee -- is a relatively low 0.57%.
This ETF doesn't have much of a performance yet, as it's just a few years old. It badly lagged the S&P 500 last year and is well ahead of it so far this year. 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?
Relatively few rare-earth and strategic metals companies had strong performances over the past year, as the global economy has put pressure on the industry. Newmont Mining
Other companies didn't do as well last year, but could see their fortunes change in the coming years. Molycorp
The big picture
Demand for critical metals 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.
Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter here, holds no position in any company mentioned. Click here to see her holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Titanium Metals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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