The explosive growth of the exchange-traded-products industry in the U.S. over the past few years means that there's an exchange-traded fund or exchange-traded note for just about anything.

Want to buy big U.S. stock indexes like the S&P 500 or the Russell 2000? Try the S&P 500 SPDR (SPY) or the iShares Russell 2000 ETF (IWM). Interested in foreign equities? You can buy developed markets (EFA), emerging markets (VWO) or almost any country-specific index you want (Japan, China, Brazil, Russia, etc.).

And it's not just stocks. You can buy bonds of all types - real estate, currencies, commodities and other alternative assets. There are now more than 790 ETFs and ETNs on the market, and you can buy access to just about anything.

Given such a wide array of products, examining the relative performance of ETFs is an easy way to determine the relative performance of various asset classes. With the first half of the year behind us, now's a good time to do just that.

First Half 2008 In Review

We all know that the first half of 2008 was a brutal period for the equity markets. The S&P 500 closed down more than 12%, and foreign stocks didn't do much better - the MSCI EAFE Developed Markets Index was down nearly 11%, for instance.

What was up? In a word: commodities.

Get this: If you exclude the so-called "inverse" ETFs - ETFs that are designed to go up when the market goes down - the 39 top-performing ETFs over the first six months of the year were ALL either commodity or natural resource funds.

You have to go all the way down to #40 before you hit the CurrencyShares Australian Dollar ETF (FXA), which posted a 12.33% return.

The table immediately below lists the top-10-performing ETFs over the first half of the year, excluding the inverse ETFs, and it's obvious that commodities rose to the top.

For comparison, the next table shows the 10 worst performers. Clearly, it was not a good time to be invested in Financials, which, broadly defined, captured six of the bottom 10 slots. India also had a rough first half, with the iPath MSCI India Index falling 42%.

Source: Morningstar. Data as of 6/30/2008.

Asset Class Comparison

We can get a general feel for the performance of various asset classes by examining the performance of the largest ETFs or ETNs in each major group. Here again, commodities (and other alternatives) rise to the top. The leading broad-based commodity product, the iPath DJ-AIG Commodity ETN, returned a sharp 27.09% so far this year, followed by gold (GLD, up 10.98%) and the euro (FXE, up 9.68%). Fixed income managed nearly flat returns, while all major stock categories tumbled.

The spread between broad-based commodities and U.S. stocks in our study is nearly 30%. In just six months! That's diversification at work.

Source: Morningstar. Data as of 6/30/2008.

Of course, not all commodities performed equally well. According to IndexUniverse.com, there were 33 commodity-focused ETFs and ETNs in existence on January 1, 2008. Their performance since then is listed below.

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