Four Top-Performing ETFs

By Billy Fisher | November 30, 2009 AAA

November has produced an interesting shakeup among the top-performing ETFs for the month. Inflationary concerns and a rejuvenated healthcare sector have been two key drivers behind some of the best-performing ETFs. Here are four top-performing ETFs for investors to watch:

IN PICTURES: 7 Tools Of The Trade

Golden Glimmer
After rising 13% in the past four weeks, the SPDR Gold Shares ETF (NYSE: GLD) has left most other non-leveraged ETFs in the dust during this time period. On November 25, the price of gold hit a record high as it closed in on $1,200 an ounce. The price of gold and, in turn, GLD, have been on the upswing as the dollar continues to plummet while investors hedge against inflation.

As one can imagine, this price movement has been extremely positive for gold-mining companies. The Market Vectors Gold Miners ETF (NYSE: GDX), which holds a basket of gold-mining stocks, has risen 16% over the past four weeks. The PowerShares DB U.S. Dollar Index Bullish (NYSE: UUP) has been on the wrong end of the stick as gold has surged up the charts. This ETF has fallen 17% from its March high.

Healthy Living
The healthcare sector has been on a remarkable roll as of late despite looming uncertainty around the space. The Healthcare Select Sector SPDR ETF (NYSE: XLV) has gained 8% over the past four weeks. This ETF contains holdings from the medical device, health insurance and biotech industries.

Opposition from the GOP to Democrat-backed versions of healthcare reform bills in Congress has led investors to start wading back into healthcare stocks. Although Senate Democrats succeeded in overcoming an attempted filibuster by Republicans this past weekend, formal debate on the Senate floor could carry into next year. The more roadblocks that this legislation encounters along the way, the better off XLV will be.

One subsector within healthcare that has had a relatively good November is the pharmaceutical industry. This area has been fortunate that healthcare reform legislation has placed less focus than previously expected on pharma. Over the past four weeks, the SPDR S&P Pharmaceuticals ETF (NYSE: XPH) has climbed 6.5%. This ETF has 22 holdings that consist of a pretty even mix of small-, mid- and large-cap pharmaceutical companies.

The Bottom Line
The ETFs that have been the star performers in November could change direction at any time. While it might seem unlikely now, a strengthening of the dollar and changes in the political climate in D.C. surrounding healthcare could spell trouble for these ETFs in the future. For the time being, they are burning the brightest. (To learn more, read How To Use ETFs In Your Portfolio.)

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