The best-performing exchange-traded funds signal a bottoming in two key areas of the U.S. economy: real estate and commodities. The ETFs also point to a bottom-fishing expedition in value stocks.

After excluding the 20 ETFs that use leverage, 10 of the 25 best-performing funds in April invest in real estate.

Pending sales of existing U.S. homes rose in April for the second month in a row, showing buyers are locking in prices that are cheaper than at any time in a generation. Add to that a gain in construction spending bolstered by commercial and government stimulus projects, and the foundation is laid for an upturn.

Of the real estate funds, none performed better than the iShares FTSE NAREIT Retail Capped Index Fund ( RTL). The fund returned 51% as four of its holdings more than doubled in value, including 236% from CBL & Associates ( CBL), 180% from Macerich ( MAC), 118% from Pennsylvania Real Estate Investment Trust ( PEI) and 106% in Cedar Shopping Centers ( CDR).

Another big winner in April, the PowerShares FTSE RAFI Basic Materials Sector Portfolio ( PRFM) jumped nearly 38%, the top performer of the six commodity funds making the list. Holdings contributing to the ascent include a 113% jump from Ashland ( ASH), 92% from Domtar ( UFS) and 90% from Dow Chemical ( DOW).

The other five commodity funds making the list focus on coal, timber and steel. All are positioned to be early beneficiaries of a renewal in demand during an economic recovery.

Commodity funds experienced a freefall, collapsing as much as 62%, since my September article on Five Commodity ETFs to Avoid. After bouncing along the bottom for a few months, commodity funds present an attractive bet on an economic recovery and offer an inflation hedge.

The best-performing, non-leveraged ETF in April was one of four value-stock funds, the Rydex S&P Smallcap 600 Pure Value ETF ( RZV), up almost 52%. Sixteen holdings more than doubled in value, with Sonic Automotive ( SAH), up 223%; Ruby Tuesday ( RT), up 163%; and OfficeMax ( OMX), up 132%, as investors snapped up good companies previously mauled by the bear market for stocks.

Best-Performing Exchange Traded Funds in April
Fund (Ticker) Rating Objective Total Return 1 Month
Rydex S&P Smallcap 600 Pure Value ETF (RZV) C- Value-Small Cap 51.5%
iShares FTSE NAREIT Retail Capped Index Fund (RTL) E- Sector Fund-Real Estate 51.0%
iShares FTSE EPRA/NAREIT North America Index Fund (IFNA) E- Sector Fund-Real Estate 38.4%
PowerShares FTSE RAFI Basic Materials Sector Portfolio (PRFM) E+ Sector Fund-Undefined Equity 37.5%
Market Vectors - Indonesia Index ETF (IDX) U Country Fund-Indonesia 36.5%
iShares FTSE NAREIT Industrial/Office Capped Index Fund (FIO) E Sector Fund-Real Estate 33.4%
First Trust S&P REIT Index Fund (FRI) E Sector Fund-Real Estate 33.3%
Rydex S&P 500 Pure Value ETF (RPV) C- Value-Large Cap 33.2%
iShares Cohen & Steers Realty Majors Index Fund (ICF) D+ Sector Fund-Real Estate 32.5%
PowerShares Global Coal Portfolio (PKOL) U Sector Fund-Energy 31.9%
Claymore/Clear Global Timber Index ETF (CUT) E+ Sector Fund-Undefined Equity 31.8%
Market Vectors - Gaming ETF (BJK) E+ Sector Fund-Gaming & Enternt 31.7%
SPDR Dow Jones REIT ETF (RWR) D+ Sector Fund-Real Estate 31.6%
Vanguard REIT ETF (VNQ) C- Sector Fund-Real Estate 30.7%
Rydex S&P Equal Weight Consumer Discretionary ETF (RCD) C- Sector Fund-Undefined Equity 30.5%
Market Vectors - Coal ETF (KOL) E Sector Fund-Energy 29.8%
PowerShares Active U.S. Real Estate Fund (PSR) U Sector Fund-Real Estate 29.8%
Claymore/S&P Global Dividend Opportunities Index ETF (LVL) E+ Value 29.7%
iShares Dow Jones US Real Estate Index Fund (IYR) C- Sector Fund-Real Estate 29.6%
Rydex S&P Midcap 400 Pure Value ETF (RFV) C Value-Mid Cap 29.5%
iShares S&P N. Amer Tech-Multimedia Networking Index (IGN) D+ Sector Fund-Technology 29.5%
iShares S&P Global Timber & Forestry Index Fund (WOOD) U Sector Fund-Undefined Equity 28.5%
Market Vectors - Steel Index Fund (SLX) E+ Sector Fund-Energy 28.4%
iShares Dow Jones US Home Construction Index Fund (ITB) D- Sector Fund-Real Estate 28.3%
Rydex S&P Smallcap 600 Pure Growth ETF (RZG) C Growth-Small Cap 27.9%
Source: Ratings & Bloomberg
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Kevin Baker became the senior financial analyst for TSC Ratings upon the August 2006 acquisition of Weiss Ratings by, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.