After all of the global expansion we saw throughout 2007, it’s no big surprise that exchange traded funds (ETFs) tapping into those markets remained the strongest performers.

It was a race to the finish line, but the top-performing ETF this year wasn’t even an ETF. It was the iPath MSCI India ETN (INP), with a return of 87.1%. India remains attractive for investors, because not only is it a growing economy, but there is still room to grow. It’s poised to pass China as the world’s fastest-growing car market in 2008. Consumer spending in India continues to rise. However, among the country’s weak spots are that illiteracy remains high and the infrastructure could stand improvement. If the country works to improve those and other areas, growth could continue.

Following close behind was the the Market Vectors Steel (SLX), finishing up 85.4%,which also has global growth to thank. As economies such as those in China, India and Brazil continue to grow, there’s going to be demand for construction, and that means: steel. Lots of it. In addition, the world’s fleet of cargo ships is getting old, so steel demand could remain high as new ones are built to replace them.

Brazil was another big story this year, and the iShares MSCI Brazil Index (EWZ) was a strong performer, finishing up 75.7%. Among the factors that make Brazil so attractive are that inflation is near 40-year lows, the currency is strong, and it has a wealth of natural resources.

No real shocker, the Claymore/BNY BRIC (EEB) finished up 68.1% this year. The fund consists of Brazil, Russia, India and China, which happen to be among the top-performing countries this year. This fund was attractive for investors who just couldn’t decide which emerging market to go after and instead wanted to cover all the bases. Indecisiveness has never paid off so well, has it?

People in China continued to flock to the cities in droves, creating ever-growing demand for construction, technology and food. This is partly why the PowerShares Golden Dragon Halter USX China (PGJ) fund did well. It finished the year up 63.1%. Beijing hosts the 2008 Summer Olympics — will things continue to get better?

"An Inconvenient Truth" might have helped make a very convenient ETF: the PowerShares WilderHill Clean Energy (PBW). Now more than ever, it seems, people are interested in minimizing their impact on the environment. That, in turn, benefits companies with a commitment to clean energy. The fund received a boost earlier this month when President Bush signed an energy bill that calls for an increase in fuel efficiency standards and more use of biofuels. PBW wrapped up the year up 59.3%.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.