This Month's Top-Performing ETFs: Politics, Fed Rate Cut Hopes Ignite 30%-Plus Rally In These 2 Funds

Throughout November, financial markets experienced a significant upswing, with both stocks and bonds on the rise.

This surge was primarily driven by investors increasing their bets on potential Federal Reserve rate cuts in the upcoming year. Inflation continues to cool and Fed policymakers lean toward more dovish remarks.

This optimism was reflected across various segments of the market. Let’s break down the top-performing exchange-traded funds (ETFs) across various asset classes, including country equities, U.S. equity sectors, thematic equities, bonds, and commodities.

Best Country ETFs In November

1. Global X MSCI Argentina ETF ARGT up 31.5%: Topping the list, the ARGT ETF experienced a remarkable surge, buoyed by the electoral victory of ultra-liberalist Andrei Milei in Argentina. This political shift sparked a wave of bullish sentiment in Argentine stocks.
2. iShares MSCI Israel ETF EIS up 16.6%: Israeli equities also witnessed substantial growth. This rise was supported by a stabilization in the shekel, thanks to the intervention by the Bank of Israel following the start of conflict with Hamas.
3. iShares South Korea ETF EWY up 14.5%: South Korean stocks rallied following the financial regulator’s decision to re-impose a full ban on short-selling, providing a boost to the market.

Chart: ARGT ETF Posted Its Best-Performing Month In November

Best U.S. Equity Sector ETFs In November

1. Technology Select Sector SPDR Fund XLK up 12.2%: The technology sector emerged as the front-runner in November. This uptrend is linked to the improved investor outlook and the anticipated decline in Federal Reserve interest rates.
2. Real Estate Select Sector SPDR Fund XLRE up 11.9%: Real estate stocks also rallied in response to expectations of lower interest rates next year, which could provide a much-needed respite to a sector that has been severely hit by the elevated mortgage rates.
3. Financial Select Sector SPDR Fund XLF up 10.5%: The financial sector, particularly bank stocks, showed robust gains, fueled by the prospect of increased lending activity amid borrowing costs next year.

Read also: Chilling 2024 S&P 500 Outlook: Why JPMorgan Analysts Project Nightmare Scenario For Stocks

Best Thematic ETFs In November

1. ARK Innovation ETF ARKK up 31.4%: Cathie Wood’s flagship fund, ARKK, recorded its best month since inception, driven primarily by a rally in crypto-related companies and tech startups.
2. Spear Alpha ETF SPRX up 22.87%: SPRX also showed significant gains, benefiting from the overall positive market sentiment towards tech stocks.
3. Amplify Thematic All-Stars ETF MVSP up 18.8%

Chart: November 2023 Was Cathie Wood’s ARKK ETF Best Performing Month Ever

Best Fixed-Income ETFs In November

1. PIMCO 25 Year Zero Coupon U.S. Treasury Index ETF ZROZ up 14%: The decline in long-dated Treasury yields fueled a rally in the fixed-income duration. November 2023 was the strongest month for this portion of the bond market since August 2019, and the second best one since January 2015.
2. iShares 25 Year STRIPS Bond ETF GOVZ up 13.3%
3. Vanguard Extended Duration Treasury ETF EDV up 12.5%

Best Commodity ETFs In November

1. iShares Silver Trust SLV up 10.3%: Precious metals, particularly silver, saw a sharp rally thanks to the decline in long-term Treasury yields and a weaker U.S. dollar.
2. United States Copper Index Fund ETV CPER up 5.2%: Copper also saw gains, influenced by the softer dollar.
3. Teucrium Soybean Fund ETV SOYB up 3.5%

Read Now: Cathie Wood’s ARK Innovation ETF Achieves 35% Gain In November, Its Best Month Since Inception