You may have heard of exchange-traded funds, ETF for short, which are investment vehicles that track an index. But did you know there are bond ETFs?

ETFs work much like index mutual funds in that they hold assets in quantities mimicking an index. But, unlike mutual funds, ETFs trade on an exchange, like a stock.

Bond ETFs are simply ETFs that track a bond index instead of a stock index. Some track broad bond indices, such as the Lehman US Aggregate Index. Others track narrower bond indices, such as the Lehman 1-3 Year Bond Index and the Lehman 7-10 Year Bond Index. This allows investors to obtain exposure to bonds of specific maturities.

Bond ETFs are attractive because they offer easy diversification as well as low costs and tax efficiency. Because they aren’t actively managed, ETFs typically don’t have high fees. They also tend to have low turnover, to they generate relatively low capital gains.

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Today’s energy markets are booming, and that’s fueled demand for new ways to invest in the sector—including exchange-traded funds, or ETFs.

ETFs are investment vehicles. They work much like index mutual funds in that they hold assets in quantities mimicking an index. But, unlike mutual funds, ETFs trade on an exchange, like a stock.

Energy ETFs are simply ETFs that track energy-related securities. Some of them track broad market indices, such as the Dow Jones U.S. Energy Sector Index or the Goldman Sachs Natural Resources Index. Other track specific sub-sectors, such as oil, natural gas, or alternative energy. You can even get energy ETFs that invest only in foreign stocks.

Most investors won’t want to make energy ETFs the bulk of their portfolio—it’s simply too risky. But energy ETFs can be a good diversifier. That’s because they can help hedge your portfolio against rising energy prices, which can drive up inflation and drive down the prices of stocks.

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You may have heard about currency trading, but chances are you haven’t done it.

That’s because currency trading is tough for the non-professional investor, since it requires a sophisticated understanding of subtle fluctuations between world currencies.

In 2005, however, one investment firm made it a little easier to trade currencies by launching the first currency exchange-traded fund.

An exchange-traded fund, ETF for short, is an investment vehicle. Like a mutual fund, it holds assets, such as stocks or bonds. But unlike a mutual fund, it trades on an exchange, like a stock.

A currency ETF—and there are many today—is simply an ETF that invests in a currency, such as the U.S. dollar, the euro, the Japanese yen and even the Swedish krona.

Why consider a currency ETF? In part because it can be used to hedge against the falling U.S. dollar—which many investors consider an increasing problem.

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Today’s energy markets are booming, fueling demand for new ways to invest in the sector—and making commodities ETFs more and more popular.

First, let’s review how ETFs, or exchange-traded funds, work. These investment vehicles, like mutual funds, hold assets, such as stocks or bonds. But, unlike mutual funds, they trade on an exchange, like stocks.

Commodities ETFs are simply ETFs that track commodities, such as precious metals, oil, gas, and crops. Different commodities ETFs do this in different ways. Some hold physical assets, so each share in an ETF might present a specified amount of the asset—say, one-tenth of an ounce of gold. Others track the performance of commodities-related stocks or futures contracts.

Most investors won’t want to make commodities ETFs the bulk of their portfolio—it’s simply too risky. But commodities ETFs can be a good diversifier. That’s because they can help hedge your portfolio against rising commodities prices, which can drive up inflation and drive down the prices of stocks.

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So you’re interested in PowerShares ETFs?

First, let’s review how ETFs, or exchange-traded funds, work. These investment vehicles, like mutual funds, hold assets, such as stocks or bonds. But, unlike mutual funds, they trade on an exchange, like stocks.

PowerShares are simply a brand of ETFs. They’re managed by PowerShares Capital Management LLC, which is a unit of a UK-based investment management company called INVESCO PLC.

There are almost 50 PowerShares ETFs available, and they focus on a variety of market sectors.

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Exchange-traded funds. Index funds. What’s the difference?

An exchange-traded fund, ETF for short, is an investment vehicle. Like a mutual fund, it holds assets, such as stocks or bonds. But, unlike a mutual fund, it trades on an exchange, like a stock.

Most ETFs track an index, such as the Dow Jones Industrial Average or the S&P 500 Index. As a result, many people think of ETFs as modified index funds.

ETFs, which are relatively new investments, are attractive because of their low costs and tax efficiency. Because they aren’t actively managed, ETFs typically don’t have high fees. They also tend to have low turnover, to they generate relatively low capital gains.

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Mortgage-backed securities may sound complicated, but they really aren’t.

When you take out a mortgage with a local bank, that bank typically sells the mortgage to another entity—usually a big financial institution, such as an investment bank or one of the two U.S. mortgage giants, Fannie Mae and Freddie Mac.

Those financial institutions take your mortgage, packages it with hundreds of other mortgages, and sell shares of the package. These shares are called mortgage-backed securities.

Simple, right?

If you’re familiar with the term, it’s probably because mortgage-backed securities became controversial during the housing boom of 2004 and 2005.

Around that time, lower interest rates increased consumer demand for loans, and banks responded by creating a new type of mortgage. It was called the subprime mortgage, and it was made to individuals with questionable credit histories.

Banks then sold these subprime mortgages, which were packaged together with regular mortgages in mortgage-backed securities.

With this kind of structure, investment-grade ratings were awarded to billions of dollars of mortgage-backed securities that had subprime mortgages as underlying collateral. Then, in 2007 and 2008, when the subprime mortgages defaulted, so did the mortgage-backed securities.

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Collateralized debt obligations, also called CDOs, may sound complicated—but they really aren’t.

CDOs are simply a type of security, like a stock or a bond. What makes CDOs different from stocks and bonds, however, is that they’re not single securities, but packages of many securities.

Essentially, a CDO is a corporate entity that owns many debt-type assets, such as bonds and loans. The CDO then “securitizes” this package of debt assets, which means it sells shares to investors.

Although CDOs don’t focus on one type of debt, they tend not to invest in mortgages.

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Congress authorized the creation of 401(k) plans in 1981, and today they’re governed by the U.S. Department of Labor.

Although the government sets general regulations for 401(k) plans, plan administrators and employers may follow these regulations in a variety of ways.

For example, regulations allow 401(k) plans to permit hardship withdrawals, but 401(k) plans don’t have to do so. Employers can also match your plan contributions in varying amounts, or not at all.

As a result, when you enroll in a 401(k) plan, it’s a good idea to familiarize yourself with your plan’s policies. Your plan administrator or employer will probably offer a welcome packet explaining everything you need to know.

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So you’re interested in transferring your IRA assets.

When you change jobs or retire, you can roll your 401(k) assets into another 401(k) plan, if available, or an IRA.

There are two ways you can do this.

First, you can make a direct rollover. This means the check goes directly from your current plan to your new plan. Because you never touch the money, taxes aren’t withheld.

A direct rollover is a good idea if it’s available, because the other option—an indirect rollover—can get tricky. With an indirect rollover, the check goes from your current plan to you, and you send it to your new plan. The problem is, your plan withholds 20 percent of your money and sends it to the IRS. The remaining 80 percent, which you receive, must be deposited into a qualified retirement plan within 60 days, or it’s subject to a 10 percent penalty. The good news: If you do put the remaining 80 percent in a qualified retirement plan, you can recover the 20 percent sent to the IRS by submitting a special form with your next tax return. When you get the 20 percent back, however, it also has to be deposited in a qualified retirement account within 60 days, or—you guessed it—it’s subject to a 10 percent penalty.

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