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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