Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you regard solar power as a growing and inevitably important energy source in the future, the Guggenheim Solar
ETFs often sport lower expense ratios than their mutual fund cousins. The Guggenheim Solar ETF's expense ratio is no exception. Its annual fee of 0.65%, while higher than that of many ETFs, remains well below the typical mutual fund rate.
This ETF doesn't have a strong long-term track record, but that's because it's relatively young. It gained less than the overall market in 2009, and lost 28% in 2010. It's up about 18% so far this year. As with most investments, 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?
Several of this ETF's components made strong contributions to its performance over the past year. Power-One
Other companies didn't add much to the ETF's returns last year, but they could have an effect in the years to come. SunPower
The ETF holds 34 different securities, with a huge 21% chunk in low-cost industry leader First Solar
The big picture
A well-chosen ETF can grant you instant diversification across the industry -- and make investing in and profiting from the sector that much easier.
ETFs can help you find the way to better investing results. To find some great ETF investing ideas, take a look at The Motley Fool's special free report, " 3 ETFs Set to Soar During the Recovery ."
We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
Longtime Fool contributor Selena Maranjian owns shares of First Solar. First Solar is a Motley Fool Rule Breakers pick. The Fool owns shares of Power-One and SunPower. Try any of our investing newsletter services free for 30 days. The Motley Fool is Fools writing for Fools.