Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you’d like to load up on some promising small-cap stocks because of their superior growth potential, the Vanguard Small-Cap ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The Vanguard ETF's expense ratio -- its annual fee -- is a very low 0.16%. (Vanguard is known for low fees.) The ETF even offers a dividend yield of roughly 1.2%.
This ETF has performed well, beating the 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.
With a low turnover rate of 17%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
More than a handful of small-cap companies had spectacular performances over the past year. Onyx Pharmaceuticals
Private equity and venture capital specialist American Capital
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.
There are plenty of other appealing ETFs out there to consider. Learn about three that our Fool analysts think are a good investment in the Fool's free report, "3 ETFs Set to Soar During the Recovery."