BY MURRAY COLEMAN, Investor's Business Daily

Many exchange traded funds whose performance is tied to emerging markets have made good gains the past few months, despite a recent slight pullback.

But nations with manufacturing breadth are doing better right now than those relying on commodities like oil. The latter are taking a breather after three-plus years of go-go growth.

Take a look at IBD's screen of top performing ETFs in the past three months. Three of the top four track developing countries.

But one big difference is showing up. Two of the top performers, iShares MSCI Brazil (EWZ) and iShares FTSE/Xinhua China 25 Index Fund, (FXI) maintain high Relative Price Strength Ratings. That means institutional investors are still showing confidence in those markets. And each has a bullish B Accumulation/Distribution Rating.

Selling South Africa

The same isn't holding true for iShares MSCI South Africa Index Fund. (EZA) Its RS Rating slipped to 86 and its Accumulation/Distribution Rating dropped to D- in a little more than a week. Also among the best performers is iShares MSCI Emerging Markets Index Fund. (EEM) Its 6.8% correction has left it with an RS Rating of 82 and an Accumulation/Distribution Rating of D+. Both are trying to stay above their 50-day moving averages.

But are recent declines signs that emerging markets are slipping?

"The fastest growing emerging markets in the past have been driven by companies that pull metals and energy out of the ground," said Bruce Zaro, chief technical strategist at Delta Global Advisors. "Now they're really taking it on the chin as commodities pull back."

His money management firm has been studying technical factors in various developing stock markets. "We're finding a subtle shift," said Zaro. "We're starting to see funds tied to China and its key trading partners in Asia outperform countries that are tied to just energy or metals."

Commodity Breather

Martin Schulz, director of international equities at Allegiant Asset Management, agrees. "Basic commodities are taking a breather," he said. "That's good news to industrial companies who've been squeezed the last two years by rising raw material prices."

Japan's recovery has also given an economic boost to other Asian markets. In December, Japanese machinery orders rose 6.8% from November, way above analysts' expectations of 1.5%. It was the third straight month of growth. March forecasts have also been raised.

Keith Newcomb, a Nashville, Tenn.-based financial adviser, is using iShares MSCI Japan Index Fund (EWJ) to tap into that market. Its Acc/Dis Rating is slightly above average at C+. It had been moving sideways for almost a year. But institutional investors started buying more of the fund in mid-August.

At the same time, the ETF's price staged a breakout on heavy volume. "That's when it caught our attention," Newcomb said.