Choosing the Best Industry ETFs

These days, perusing the selection of exchange-traded funds that cover
the same industry seems like shopping for olive oil at Whole Foods:
There are endless brands and variations on the same core product. <!---->The
choices can be overwhelming: Should you bet on the iShares oil and gas
ETF or go with the PowerShares version? There's also an SPDR fund to
consider.

As of May 1, there were 107 industry-specific ETFs providing
exposure to more than 30 different industries, according to a Morgan
Stanley report released this week. By design, industry-specific ETFs
allow investors to own a basket of stocks in a given slice of the
economy. "It's a low-risk way to play an industry you might like," says
Paul Mazzilli, Morgan Stanley's director of ETF research. "Instead of
betting on one name, you can bet on, say, 20-something names."