The best-performing sector fund right now? Believe it or not, an exchange-traded fund tracking homebuilder stocks is the winner.

The iShares Dow Jones U.S. Home Construction Index Fund (ITB) has a year-to-date return of 10.5%, according to The Wall Street Journal. It's the most successful ETF that doesn't use leverage.

But before you plow any money into ITB, consider that it's more than twice as volatile as the S&P 500 index. The housing sector that the fund focuses on is highly cyclical and sensitive to economic and credit conditions, wrote one Morningstar analyst.

The $330 million ITB has 70% in home builders, according to the Journal. It made a big bet on Lennar (LEN), which has jumped more than 30% this year.

Will ITB be able to keep its momentum? Life isn't getting any easier for the home building industry. High unemployment and foreclosures continue, the Morningstar analyst said.

The government is slowly cutting back on aid to homeowners. It's ending a program to buy mortgage-backed securities, which will likely push up mortgage rates, according to the Journal.

Furthermore, the first-time homebuyer tax credit is set to expire, and the Federal Housing Administration is tightening up its lending guidelines.