Top ETFs Heavy on Metal

Editor's note: As a special feature for April, TheStreet.com is offering a series reviewing the first-quarter performance of mutual funds and ETFs. This is the fifth installment.

Seven of the top 10 exchange-traded fund performers for the first quarter of 2007 focus their holdings on metals, materials or petroleum industries. Until the day when ETFs are created that invest in cardboard box producers, it would be difficult to imagine a more unglamorous group.

But as our list of ETF leaders in the accompanying table clearly demonstrates, solid returns -- not glamour -- is what makes an investment attractive.

Also among our list of top ETFs are those investing overseas -- four of the top 10 ETFs focus their portfolios abroad. Three of these ETFs are located in the Asia-Pacific region. Those three each carry a grade in the "A" range, which equates to "buy" recommendations. In fact, two have the highest possible marks of A-plus.

The iShares MSCI Malaysia Fund (EWM Quote) has rewarded its investors with a total return just shy of 50% over the past 12 months. This just beat out the ETF that invests in Malaysia's neighbor, the iShares Singapore Fund (EWS Quote), which increased 44.78% in the past year.

However, the presence of the iShares MSCI Taiwan Fund (EWT Quote) and the iShares FTSE/Xinjua China 25 (FXI Quote) on the roster of 10 ETF laggards shows that Asia is not necessarily a slam dunk. Throwing darts at a map of Asia will no longer guarantee a winning game.

Also on the laggards list are some tech-related ETFs. HOLDRs Software (SWH Quote) and iShares Internet Infrastructure (IIH Quote) were among our worst performers for the quarter.

The only ETFs to suffer double-digit percentage setbacks in the first quarter invested in the depressed housing industry. The iShares Dow Jones U.S. Home Construction Index Fund (ITB Quote) demolished investor hopes by plunging 19.24% during the quarter.

First-Quarter ETF Leaders
ETF	Ticker	Objective	3-Month Total Return (%)	12-Month Total Return (%)	TheStreet.com Ratings Grade*
Market Vectors Steel Index	SLX	Equity Income	20.80	N/A	U
iShares MSCI Malaysia	EWM	Non-U.S. Equity	19.01	48.09	A
SPDR S&P Metals & Mining	XME	Equity Income	16.81	N/A	U
WisdomTree Intl Basic Materials	DBN	Non-U.S. Equity	13.57	N/A	U
PowerShares Dynamic Basic Materials	PYZ	Equity Income	11.30	N/A	U
iShares S&P Global Materials Index	MXI	Global Equity	10.50	N/A	U
iShares MSCI Singapore	EWS	Non-U.S. Equity	10.45	44.78	A+
iShares MSCI Australia	EWA	Non-U.S. Equity	10.43	35.69	A+
Claymore MACROshares Oil Up	UCR	Energy/Natural Resources	10.40	N/A	U
Vanguard Materials	VAW	Equity Income	10.28	19.95	B+
S&P 500 Total Return			0.64	11.83
* U is Unrated. Data as of 3/31/2007. Source: TheStreet.com Ratings

First Quarter ETF Laggards
ETF	Ticker	Objective	3-Month Total Return (%)	12-Month Total Return (%)	TheStreet.com Ratings Grade*
iShares Dow Jones U.S. Financial Serv	IYG	Financial Services	-3.81	9.48	C-
ProShares Short Midcap 400	MYY	Growth - Domestic	-3.89	N/A	U
iShares MSCI Taiwan	EWT	Non-U.S. Equity	-3.93	11.78	D-
HOLDRS Software	SWH	Growth - Domestic	-4.11	3.66	E+
HOLDRS Internet Infrastructure	IIH	Growth - Domestic	-5.91	4.85	E-
iShares FTSE/Xinhua China 25	FXI	Non-U.S. Equity	-8.09	39.51	A+
ProShares Ultra Short MidCap 400	MZZ	Growth - Domestic	-8.84	N/A	U
Claymore MACROshares Oil Down	DCR	Energy/Natural Res	-9.17	N/A	U
SPDR S&P Homebuilders ETF	XHB	Equity Income	-12.70	-26.70	E-
iShares DJ U.S. Home Cons Idx	ITB	Equity Income	-19.24	N/A	U
S&P 500 Total Return			0.64	11.83
* U is Unrated. Data as of 3/31/2007. Source: TheStreet.com Ratings

Note: The author holds a long-term investment position in the iShares MSCI Taiwan Fund.