BY MURRAY COLEMAN, Investor's Business Daily

The usual suspects show up on the latest IBD ranking of top performing exchange traded funds in the last six months.

Energy and natural resources, tech and emerging markets dominate. But cracking into the top 20 this time around is iShares Dow Jones Transportation Average Index Fund. (IYT) It follows a similar move up by several IBD industry groups. In particular, railroads and transport services have made huge leaps during the past 26 weeks.

The ETF has been gradually trading up since mid-2004. In November, volume spiked and so did share prices. On Wednesday, it set a new all-time intraday high at 79.89. "It has traveled quite a bit higher than its 200-day moving average," said Bruce Zaro, chief technical strategist at Delta Global Advisors. "We think as long as it stays above 65 it seems to have plenty of support. This is a fairly powerful uptrend."

Concentrated Fund

The ETF is concentrated. Heading into February, it had 22 names. Some 65% of its assets were in the top 10 weighted stocks. FedEx (FDX) was its No. 1 holding at 10.64% of assets. The airfreight transporter set a new intraday 52-week high at 106.92 on Wednesday.

But it wasn't alone. Union Pacific (UNP) at 8.99% of assets was its second-biggest name. It also set a new intraday 52-week high on Wednesday at 90.14. Another big holding, Burlington Northern Santa Fe, (BNI) reached a new intraday 52-week high of 82.48 last week.

Burlington and three other railroads have been driving the fund's recent performance. Delivery service providers like FedEx represented 26% of the fund's assets. Railroads were 25.71%.

"This sector is really booming," said Zaro. "Even with the volatility of energy prices, oil companies need to ship and receive goods to keep up with demand. Transporters aren't getting hurt like other industries by higher fuel costs."

Benefiting From Katrina

He says recovery projects in the Southeast related to last year's Hurricane Katrina are also keeping demand for transportation-related products high. "This is an important sector for meeting the basic needs of our economy," said Zaro. "The health we're seeing in transportation is a strong signal of continued growth."

Last month, Kevin Kennedy wasn't as bullish on transportation. He's publisher of the Coolcat ETF Report. It's rated by Hulbert Financial Digest as one of the best-performing ETF newsletters in the past 12 months.

Kennedy looks at relative strength and price momentum to pick ETFs. He won't consider any fund with trading volume averaging less than 100,000 shares a day. The iShares transportation fund averages 385,000 a day.

But its relative strength had been too low. Earlier this month, that changed. "This ETF is looking much more attractive," said Kennedy. "Out of 200-plus ETFs, it has moved within the top 15 on our lists. I'm not concerned about it being overextended."