Until last month, commodities stood out as a rare bright spot in an otherwise gloomy market environment. But while prices of several commodities have come crashing down to earth since July, ETF managers are still releasing new funds that let investors bet on a continued bull run in hard assets.

On Wednesday, Invesco PowerShares announced that it would issue four new commodities-related ETFs next month. The funds will focus on global participants in the agriculture, coal, precious metals, and steel sectors.

A crowded universe
To those who've followed ETF offerings in recent years, funds that track commodities are nothing new. PowerShares' own Commodity Index Tracking Fund (DBC), for instance, holds futures contracts in six different commodities factored into the index it tracks, including gold, oil, and corn. Since its inception in 2006, this fund has gathered more than $2.3 billion in assets. A similar iShares offering tracks the well-known Goldman Sachs Commodity Index.

Yet investors don't have to buy commodities directly to profit from their rise. Rather than investing in futures contracts, these new PowerShares funds use a more traditional approach: They buy shares of companies that produce those commodities.

Will history repeat itself?
In doing so, PowerShares is going head-to-head with rival ETF manager Van Eck. The latter company's Market Vectors ETFs were the first movers in the industry, and they've had plenty of success gaining popularity and assets. By giving its new ETFs a global name, PowerShares is trying to distinguish its offerings from Van Eck's. Yet the new ETFs will hold a number of U.S. stocks also found among the Van Eck funds' holdings.

For instance, the Market Vectors Steel ETF (SLX) rose 84% last year, and it was up sharply earlier this year. Many of the companies it holds, including U.S. Steel (NYSE:X) and ArcelorMittal (NYSE:MT) are also included in the index the new PowerShares fund will track.

Similarly, the success of coal companies like CONSOL Energy (NYSE:CNX), Peabody Energy (NYSE:BTU), and Arch Coal (NYSE:ACI) has boosted total assets under management at the Market Vectors Coal ETF (KOL) beyond the $300 million mark since its inception in January. And with $1.6 billion in assets after a single year of operation, the Market Vectors Agribusiness ETF (MOO) has seen its fortunes rise with those of PotashCorp (NYSE:POT), Monsanto (NYSE:MON), and other high-flying ag companies -- many of which you'll also find in the new PowerShares offering.

Timing is everything
It's interesting that PowerShares decided to proceed with its commodities-ETF launch despite a huge pullback in commodities stocks. The performance of the comparable Market Vectors funds over the past couple of months tells you just how much carnage these sectors have seen:

Market Vectors Fund

Return Since 6/30/2008





Gold Miners (GDX)




Source: Yahoo! Finance.

Given the negative price pressure, it's clear that PowerShares is betting on a big rebound -- or at least, on finding investors willing to bet that the past several years' gains in commodities weren't just a fluke.

If the recent pullback proves only temporary, PowerShares will have a better chance at catching up to Van Eck. Given how many ETF investors focus on short-term performance, the pullback will hurt Van Eck's year-to-date and one-year performance numbers, even as the PowerShares ETFs build a track record.

On the other hand, if commodities keep sinking, the PowerShares offerings may well find themselves in the graveyard of dissolved ETFs, such as Claymore's Sudan Free and Global Vaccine funds. PowerShares must hope that regardless of past performance, investors will recognize commodities as a separate asset class worthy of inclusion in a diversified asset allocation plan -- and that those investors will use the new PowerShares ETFs to gain exposure to stocks that will benefit from higher commodities prices.

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Fool contributor Dan Caplinger thinks commodities will rise again, though perhaps not to their former glory. He doesn't own shares of the funds and stocks mentioned in this article. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy is worth its weight in gold.