The exchange traded fund (ETF) leader in 2007 so far is Market Vectors Steel (SLX), up 41.7% year-to-date. As we’ve previously mentioned, SLX can be a wonderful portfolio addition because of the high demand for steel. As construction in emerging economies expands, so does the need for building materials.

Our mid-year ETF loser (drum roll, please) is: iShares Dow Jones US Home Construction (ITB), down 25.9%. With dropping real estate prices, higher inventory and the ongoing subprime loan debacle, it’s no wonder this area is having problems.

Some of the best performing ETFs for the month of June were energy related. For the first time since August 2006, oil prices settled above the psychologically important $70 a barrel mark last Friday. Worries about gasoline supplies in the summer driving season’s prime caused the price increase. Look for oil services and exploration ETFs to continue to profit from high oil prices.

Some of the ETFs and their year-to-date performances in this area include:

• Oil Services HOLDRs (OIH), up 25%
• iShares Dow Jones U.S. Oil and Gas Exploration & Production (IEO), up 23%
• iShares Dow Jones U.S. Oil Equipment (IEZ), up 27%
• PowerShares Dynamic Energy Exploration (PXE), up 22%
• PowerShares Dynamic Oil and Gas Services (PXJ), up 29%

For full disclosure, some of Tom Lydon’s clients own IEZ and SLX.

Tags: IEO, Metals, Oil, Real Estate, Steel

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