N orthCoast Asset Management ‘s ETF retirement portfolios caught fire in February. Bullish macro trends and patience from the Federal Reserve in raising interest rates bolstered returns for domestic holdings. International positions also moved up the charts as the European Central Bank prepared for a March launch of its quantitative easing program.

Here are some highlights from the month:

Robust Job Growth

NorthCoast kept large stakes in iShares Core S&P 500 ETF (ARCA:IVV ) based on a favorable outlook for the U.S. economy. The clearest evidence of the improved U.S. economy is in the job market, said Patrick Jamin, chief investment officer for NorthCoast. More than 1 million jobs have been created in the past three months, which is more than three times the job growth necessary to absorb the number of workers who enter the labor force in a typical year.

Shares of IVV surged 6% during the month.

Small-cap and midcap positions participated in the equity rally. IShares Core S&P Small-Cap (ARCA:IJR ) and iShares Core S&P Mid-Cap (ARCA:IJH ) saw respective gains of 6% and 5% in February.

The continued rise of the U.S. dollar has been a welcomed trend for the holdings. Although the strength or weakness of the dollar is not a leading indicator of overall performance of the stock market, historical data have proved that a stronger dollar has been a better environment for small-cap stocks than large-cap stocks, Jamin said. Small- and midcap companies will also benefit more from the relatively bullish U.S. economy since they are more domestically oriented.

Major holdings of the Tactical Income retirement portfolio climbed in February. Our outlook for iShares iBoxx $ High Yield Corporate Bond (ARCA:HYG ) is relatively bullish despite recent volatility, Jamin said. The U.S. growth and Federal Reserve’s patient approach to raising short-term rates should provide support to high-yield bonds.

HYG ended the month up 2%.

IShares Select Dividend (ARCA:DVY ) rose 1% in February. The ETF’s low correlation with the S&P 500 appeals to the NorthCoast team. Its holdings only have a 15% overlap with S&P 500 stocks and are more heavily weighted in midcap value stocks, Jamin said. Most dividend ETFs have a 75% or more overlap with the large-cap benchmark.

North Of The Border

Holdings of foreign ETFs checked in with impressive performances of their own in February. Australian stocks hit a seven-year high during the month. The upswing contributed to a 5% gain for iShares MSCI Pacific ex Japan (ARCA:EPP ). European equities enjoyed broad gains with ECB bond purchases set to start. IShares Europe (ARCA:IEV ) rallied 6% in February.

The NorthCoast team added positions in iShares MSCI Canada (ARCA:EWC ) at the beginning of the month. The buy recommendation is based on our analysis that oil prices will stabilize, Jamin said. EWC spiked 6% in February.