Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the biotech industry to thrive over time as our planet's population keeps growing, aging, and needing medical care, the iShares Nasdaq Biotechnology ETF (NYSE: IBB) 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. And more than a few of them will likely end up with profitable, blockbuster drugs.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The iShares ETF's expense ratio -- its annual fee -- is a relatively low 0.48%.

This ETF has performed rather well, beating the world market over the past three, five, and 10 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 19%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.

What's in it?
Plenty of biotech companies had strong performances over the past year. Amylin Pharmaceuticals (Nasdaq: AMLN), for example, roughly tripled in value, partly on speculation that it might get bought out for its attractive Bydureon, a once-a-week injectable for Type 2 diabetes treatment. The company carries a lot of debt, though, and isn't yet profitable.

Ariad Pharmaceuticals (Nasdaq: ARIA) gained about 111%, as bulls see its leukemia drug ponatinib getting very close to FDA approval. Meanwhile, though, it's burning through cash and its share count has been rising, reflecting dilution.

Cancer fighter Seattle Genetics (Nasdaq: SGEN) gained 77%, with bulls optimistic about its partnership with Abbott Laboratories and its focus on antibody-drug conjugates (ADC), a promising treatment arena without gobs of participants. It has no long-term debt, but it's still operating in the red and its lymphoma treatment hasn't been flying off shelves as briskly as some expected.

Vertex Pharmaceuticals (Nasdaq: VRTX) gained 14%, but some see it as a potential monster stock of the future, with its promising cystic fibrosis treatment, Kalydeco. Its sales are growing briskly, and approval in Europe is expected soon. It's also working on hepatitis C treatments, though it has strong competition on that front.

The big picture
Demand for better treatments for diseases 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.

Of course, biotech stocks can be very volatile. If you're like to build wealth with stocks that might help you sleep better, here are three solid stocks that can help you retire rich, then simply click here for access to our latest special report -- it's free!

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.