Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add some biotechnology and genome-sciences companies to your portfolio, the PowerShares Dynamic Biotech & Genome ETF (NYSEMKT:PBE) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
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 possibly 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.

Why biotech?
The biotechnology and genome arena is a very promising one for investors due to our planet's growing and aging population, which will require more medical care over time. It's not without risks, though, as many new treatments are costly to develop and don't always clear FDA hurdles.

More than a handful of biotech and genome companies had strong performances over the past year. PDL BioPharma (NASDAQ:PDLI) surged 44%, collecting royalties from a slew of medications. It offers a tempting 7.4% dividend yield, but bears worry about a handful of patents that expire in the next few years, and they also note that revenue has already not been growing briskly. Management has said it's seeking other revenue-generating assets.

Cancer-fighter Seattle Genetics (NASDAQ:SGEN) gained 15%, with bulls optimistic about its partnership with Abbott Laboratories (NYSE:ABT) (which it recently expanded) and its focus on antibody-drug coagulates, a promising treatment arena without gobs of participants. Its Adcetris, targeting those age 60 or older suffering with newly diagnosed Hodgkin's lymphoma, has recently begun phase 2 trials.

Other companies didn't do as well last year, but could see their fortunes change in the coming years. Isis Pharmaceuticals (NASDAQ:IONS) only gained 4%, but it had been up much more until recently, when the FDA expressed concerns about its lead drug, Kynamro (aka mipomersen), which is being developed with Sanofi (NASDAQ:SNY) to treat homozygous familial hypercholesterolemia, or HoFH. The FDA is worried about the drug's negative effects on liver functioning, that it creates fat buildup, and that 3% of tested patients are developing abnormal growths.

ImmunoGen (NASDAQ:IMGN) sank by 15% over the past year, and like Seattle Genetics, it doesn't have many competitors to combat. Bulls are pleased with promising results from its late-stage trial of trastuzumab emtansine, or T-DM1, for the treatment of metastatic HER2-positive breast cancer -- though FDA approval should rarely be counted on until it happens. 

The big picture
Demand for new medical products 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.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.