Commodities have been a great place for index investors to be during the month of February. Those with exposure to oil have done particularly well and even precious metal ETFs have continued to push upwards. Here are four ETFs on fire right now. (For more, see How To Pick The Best ETF.)

Investopedia Markets: Explore the best one-stop source for financial news, quotes and insights.

Crude Climbs Higher
A spike in crude inventories last week has done little to stem the recent rise in oil prices. The United States Oil Fund (ARCA:USO) has jumped about 8% since the beginning of February.

Tensions in the Middle East have certainly influenced the move higher. The price of light, sweet crude now sits at a 10-month high, just north of $109 per barrel. As unlikely of a scenario as it may be, any movement towards calm and stability could take the wind out of the sails of this rally.

As the price of a barrel of crude has moved up the charts, so have the stock prices of oil exploration companies. The iShares Dow Jones U.S. Oil & Gas Exploration & Production Index Fund (ARCA:IEO) has climbed about 10% since February 1. This ETF will likely continue to take its lead from USO in the weeks ahead. (For related reading, see An Inside Look At ETF Construction.)

Countries in the Spotlight
A number of country focused ETFs have been among the best performing ETFs during the month of February. With a heavy weighting in commodities the Market Vectors Russia ETF (ARCA:RSX) cranked out a 9.5% rally.

Tailgating off of the advance in crude oil prices, Russian stocks had their largest daily gain in three months on Feb. 24, 2012. Progress towards a resolution to the Greek debt crisis has also been a helper for RSX.

One other country focused ETF that has an impressive run during the month of February is the iShares MSCI Germany Index Fund (ARCA:EWG). The move has been partially driven by a decision by SAP AG (NYSE:SAP) to pay out dividends in excess of analysts' expectations. The stock is now at its highest level since the fall of 2000. Shares of EWG on the other hand are up 6.3% since the beginning of the month.

The Bottom Line
It has been a big month for commodity ETFs as well as for those countries with a great deal of exposure to natural resources such as Russia. Investors in these funds are probably going to face more than their fair share of volatility as we head into March. These four ETFs are on fire right now, but it would not take much to cool them off in a hurry. (For related reading, see The 5 Best Performing Gold ETFs.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

At the time of writing, Billy Fisher did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Mutual Funds & ETFs

    Top Three Transportation ETFs

    These three transportation funds attract the majority of sector volume.
  2. Stock Analysis

    5 Cheap Dividend Stocks for a Bear Market

    Here are five stocks that pay safe dividends and should be at least somewhat resilient to a bear market.
  3. Investing Basics

    Tops Tips for Trading ETFs

    A look at two different trading strategies for ETFs - one for investors and the other for active traders.
  4. Investing

    How to Win More by Losing Less in Today’s Markets

    The further you fall, the harder it is to climb back up. It’s a universal truth that is painfully apparent in the investing world.
  5. Fundamental Analysis

    Use Options Data To Predict Stock Market Direction

    Options market trading data can provide important insights about the direction of stocks and the overall market. Here’s how to track it.
  6. Stock Analysis

    2 Oil Stocks to Buy Right Now (PSX,TSO)

    Can these two oil stocks buck the trend?
  7. Investing News

    What Alcoa’s (AA) Breakup Means for Investors

    Alcoa plans to split into two companies. Is this a bullish catalyst for investors?
  8. Mutual Funds & ETFs

    Top 4 Investment Grade Corporate Bonds ETFs

    Discover detailed analysis and information about some of the top exchange-traded funds (ETFs) that offer exposure to the investment-grade corporate bond market.
  9. Stock Analysis

    Top 3 Stocks for the Coming Holiday Season

    If you want to buck the bear market trend by going long on consumer stocks, these three might be your best bets.
  10. Investing News

    Could a Rate Hike Send Stocks Higher?

    A rate hike would certainly alter the investment scene, but would it be for the better or worse?
  1. Can mutual funds invest in IPOs?

    Mutual funds can invest in initial public offerings (IPOS). However, most mutual funds have bylaws that prevent them from ... Read Full Answer >>
  2. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  3. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  4. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  5. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>
  6. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!