TheStreet.com Ratings' Model ETF Portfolio

Last month, we put together a theoretical portfolio of 10 exchange-traded funds we liked from a coverage universe of nearly 200.

Overall, our picks have performed as we had hoped, with the theoretical $10,000 portfolio returning 4.3% in November, compared with 2.7% for the S&P 500.

As the following chart shows, the energy and emerging markets and REIT ETFs in our model momentum-portfolio were the three leading contributors to performance in November, while the laggard holdings included utility, global financial and large cap-value ETFs.

(To qualify for this portfolio, the selected ETF had to have an overall score in the top 30th percentile from our ratings model, which takes into account the total return to shareholders, the timeliness of the investment, and price volatility. We chose investment styles based on the number of highly rated funds in the group and recent performance trends.)

So what changes are we suggesting for December?

Quantitatively speaking, more of the same.

Skeptics will say that one month does not a trend make, and rightly so.

But rather than specific recommendations, this theoretical portfolio is designed to help you make better investment decisions.

This month we are increasing exposure to broader international markets and currencies, selling iShares MSCI Spain (EWP Quote) and buying iShares MSCI Value Index (EFV Quote).

This is a short-term shift.

While our interest in the Spanish economy has been sparked by acquisition talks, it is likely that this deal-driven market may cool off over the next few months.

We suggest adding the MSCI Value Index because it provides exposure to Japan and United Kingdom through its holdings in HSBC(HBC Quote), Toyota(TM Quote) and Royal Bank of Scotland(RBS-PP Quote).

The Long ETF Portfolio's Performance in November Energy, emerging markets and REITs were biggest contributors
ETF	Ticker	Units	Amt	11/31/06 Price	End Value	Gain/Loss (%)
iShares MSCI Spain	EWP	19	956.65	53.1	1,008.90	5.50%
streetTRACKS Gold Shares	GLD	16	981.76	64.39	1,030.24	4.90%
iShares Russell Mid Cap Value	IWS	7	984.34	146.2	1,023.40	4.00%
iShares S&P Global Financials	IXG	11	946.66	87.94	967.34	2.20%
iShares S&P Global Telecom	IXP	16	970.24	62.18	994.88	2.50%
iShares Dow Jones US Energy	IYE	10	956.4	104.73	1,047.30	9.50%
iShares Morningstar Large Value	JKF	12	962.28	82.15	985.8	2.40%
Utilities HOLDRs	UTH	7	910.7	130.93	916.51	0.60%
Vanguard REIT ETF	VNQ	13	984.75	79.99	1,039.87	5.60%
Vanguard Emerging Markets ETF	VWO	14	986.86	75.72	1,060.08	7.40%
Holdings Subtotal			9,640.64		10,074.32	4.50%
Cash		1	359.36		359.36	0.00%
Total			10,000.00		10,433.68	4.30%
S&P500 (SPY)				$140.53		2.70%