The telecommunications sector was one of the top 10 performers last year, Standard & Poor's says. It's off to a good start in 2007.

WisdomTree International Communications (NYSE:DGG - News) is at the top among telecom ETFs year to date with a 5.33% gain. It holds 137 stocks with an average market cap of $41.9 million. The dividend-paying stocks come from developed markets outside the U.S. It yields 4.42%. The top five holdings account for 40% of the assets: Vodafone (NYSE:VOD - News), France Telecom (NYSE:FTE - News), Deutsche Telekom (NYSE:DT - News), China Mobile (NYSE:CHL - News) and Telefonica (NYSE:TEF - News). The newest telecom fund started trading in October. It climbed to a peak of 30.14 on Jan. 24 and dipped toward the 10-week average.

Vanguard Telecom Services (AMEX:VOX - News) is up 4.8% year-to-date as of Friday, Feb. 9, Morningstar says. The top holdings: AT&T (NYSE:T - News), Verizon (NYSE:VZ - News), Sprint Nextel (NYSE:S - News), Alltel (NYSE:AT - News), make up more than 60% of the portfolio. Nearly 33% of assets in the 44-stock portfolio are concentrated in those top two companies. It cleared a base in August and has since pulled back to the 10-week moving average twice. It's now about 2% over its most recent buy point of 74.42.

Blue Chip Telecoms

IShares S&P Global Telecommunications (AMEX:IXP - News), up 4.99% year-to-date, tracks the telecommunications sector of the S&P's Global 1200 index. The top five holdings in the 46-stock portfolio make up 48% of the fund: AT&T, Vodafone, Verizon, Telefonica, Nippon Telegraph & Telephone (NYSE:NTT - News). This ETF climbed to an all-time high of 65.96 last week. It dipped just below its 64.95 buy point, then recovered.

Largest ETF

The largest telecom ETF, iShares Dow Jones US Telecom (AMEX:IYZ - News) is up 4.63% year-to-date. Its 27 stocks overlap those of Vanguard Telecom Services. The top five holdings command nearly 60% of total assets. The average market cap: $86.54 billion.

It met a five-year peak at 31 on Jan. 25. It's trading 1% over a 30.09 buy point.

Other telecom ETFs and their returns are PowerShares Dynamic Telecom & Wireless (AMEX:PTE - News), 2.76%; Telecom Holdrs (AMEX:TTH - News), 3.14%; PowerShares FTSE RAFI Telecommunications (NasdaqGM:PRFQ - News), 2.59%; and Wireless Holdrs (AMEX:WMH - News). 1.93%.

Among the funds mentioned above, iShares S&P Global Telecommunications has the highest Relative Strength Rating, 76, and highest Accumulation/Distribution Rating, A+.

The country's largest phone company, AT&T, reported that fourth-quarter earnings jumped 27% from the year ago period, beating Wall Street estimates by 3.4%. Sales rose 23% to $15.9 billion. It bought out BellSouth for $86 billion in December, which gave it full ownership of Cingular Wireless. Before that it merged with SBC Communications in November 2005.