This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Best-Performing ETFs of 2008

Stocks in this article: TLT BBH XPH

"Ultra-short" set the style in 2008 in top-performing exchange-traded funds.

Since ETFs offer lots of "inverse" funds, which rise when indices fall and vice versa, those topped the list during the dismal year that just ended. Inverse-leveraged funds, which use borrowed money to amplify gains, did even better.

Of 620 ETFs tracked by Ratings for which complete 2008 returns are available, 71 managed to avoid the maelstrom that brought down many popular equity indices by 30% or more. Most of the winners were inverse funds.

An accompanying table lists top-performers in broad classifications of ETFs.

Short funds were tops among inverse and leveraged offerings, particularly technology and growth funds. Anyone tempted to join that party should look at the column of December returns. A modest upturn in the market can hit holders with depressingly quick double-digit losses.

As the Federal Reserve lowered interest rates, the few ETFs that focus on long-term Treasury bonds easily outdistanced other investments on the "long" side. The three top-performing bond ETFs in the table achieved impressive returns over one month, three months and one year.

Among non-leveraged equity funds, health and biotechnology funds dominated, confounding some experts. The top three in that area moved up smartly in December, although only one managed a positive total return for the year.

Although it lost ground during the final quarter of 2008, HOLDRs Biotech (BBH) finished the year with a net gain of 10.2%. Its top stocks include Genentech (DNA), Amgen (AMGN), Gilead Sciences (GILD) and Biogen IDEC (BIIB).

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,088.01 +57.80 0.32%
S&P 500 2,091.31 +9.43 0.45%
NASDAQ 4,808.5230 +35.0510 0.73%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs