Eight of the top 10 best-performing ETFs in 2011 were focused on U.S. Treasurys—even after a historic downgrade of U.S. debt in August—an unlikely turn of events that must have surprised Pimco’s Bill Gross as much as it did gold bugs.

No. 1 on the list of 2011’s top performers was the Pimco 25-Year Zero Coupon U.S. Treasury ETF (NYSEArca: ZROZ), which returned 51.9 percent through Dec. 28. The No. 2 fund was the Vanguard Extended Duration Treasury ETF (NYSEArca: EDV), which rose 48.7 percent. Third on the list was iPath U.S. Treasury Bull ETN (NYSEArca: DTYL), which grew 44.4 percent.

With all of the uncertainty circling the globe, including turmoil in the Middle East, the unresolved eurozone debt crisis and the U.S. downgrade, one would think that investors would be making a beeline for precious metals, such as gold. But investors increasingly looked past the precious metal, which barely rose 8 percent in 2011, to take sanctuary in long-term U.S. debt.

Apart from precious metals, investors also steered clear of ETFs focused on alternative energy and the emerging markets. Solar-focused funds were among the worst investments this year. The honors for worst-in-class  goes to the Market Vectors Solar Energy ETF (NYSEArca: KWT), which lost about two-thirds of its value in 2011.

Playing Defense

While Bill Gross bet the farm on shorting Treasurys in 2011, other  investors  apparently felt that the U.S. offered the safest bet in an uncertain world economy, and they  piled into credits issued by Uncle Sam.

With investors braced for the worst, even the Nos. 9 and 10 most successful funds appeared to owe their position to fears about the future, rather than some conviction that the outlook was bullish. For example, the iShares Dow Jones U.S. Pharmaceuticals ETF (NYSEArca: IHE) returned 19 percent, in a classic example of a defensive play in an uncertain economy.

Similarly, the presence of the United States Brent Oil ETF (NYSEArca: BNO) as the No. 10 fund on the top returners list speaks more to growing concern about oil supplies at a time of upheaval in the Middle East and North Africa than a sense that a strong world economy was fueling demand for oil.

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