A little-known ETF tracking specialized financial-services firms linked to Wall Street is one of the top-performing funds this year with a gain of more than 30%.

The iShares Dow Jones US Broker-Dealers Index Fund (IAI) is having a “breakout year,” reports Eric Balchunas at Bloomberg.

The ETF is up 31% year to date and about 47% for the trailing 12 months. Among unleveraged ETFs, only alternative energy funds are having a better 2013.

“IAI is an ETF for the optimistic,” Balchunas reports. “In essence, it’s a concentrated bet on a continued economic recovery and on the spark that greater confidence among companies and consumers provides to capital markets. If the economy strengthens from here, its stable of financial stocks will benefit from any pickup in initial public offerings, mergers and acquisitions, trading and asset management.”

Investors seeking exposure to brokers, exchanges, and other capital markets facilitators might find IAI an interesting satellite holding, says Morningstar analyst Timothy Strauts in a report on the fund.

“The ‘broker/dealer’ rubric covers a wide variety of firms. Indeed, the fund includes everything from nameplate Wall Street banks with big trading operations (Goldman Sachs and Morgan Stanley) to retail and online brokers (Schwab and TD Ameritrade), exchanges (CME Group), and market specialists (Knight Capital),” he added. “Would-be investors should note that the performance of these firms is highly dependant on (and correlated with) the health of the broader capital markets.”

A similar ETF is SPDR S&P Capital Markets (KCE), which is up nearly 20% year to date. [Discount Brokers, Fund Firms Power Overlooked Financial ETF]

IAI holds about $114 million in assets under management, while KCE holds nearly $73 million.

IAI has nearly doubled in size over the last five months amid higher trading volume, according to Bloomberg.

“Anyone who invests in IAI can expect a wild ride,” Balchunas said. “This is why it should probably not be used as a core holding.”

iShares Dow Jones US Broker-Dealers Index Fund

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. 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.