Demand for Leveraged ETFs Grows

Demand for Direxion Funds' new exchange traded funds is growing as investors look to triple the performance of stock indexes.

The Direxion triple-leveraged funds, which debuted in November, climbed TheStreet.com Ratings' ranking of the 20 most-traded ETFs in February, based on average daily dollar volume.

The Direxion Financial Bear 3x Shares(FAZ Quote) fund was No. 15 in the ETF ranking, up from 29 in January. The company's Financial Bull 3x Shares(FAS Quote) fund rose to 19th from 23rd, and its Large Cap Bear 3X Shares(BGZ Quote) fund leaped to 20th from 34th.

Eight of the 20 ETFs on the list below are leveraged, meaning they seek to multiply the performance of a given index, including five ProShares funds. Five are "inverse" funds that move opposite the market.

Three funds from January's list didn't make the February roster. Oil Services HOLDRS(OIH Quote) tumbled to No. 22 from 19. The leveraged ProShares Ultra QQQ(QLD Quote)retreated to 24th from 17th, and the SPDR Mid Cap 400(MDY Quote) sank to 25th from 20th.

The SPDR S&P 500 ETF(SPY Quote) held the top spot with ease with $27.1 billion in average daily turnover. The PowerShares QQQ Trust(QQQQ Quote) ranked second with $4.9 billion.

The SPDR fund's top holdings include Exxon Mobil (XOM Quote), General Electric (GE Quote), AT&T(T Quote) and Microsoft(MSFT Quote).

MOST POPULAR ETFs IN FEBRUARY 2009 RANK, NAME, TICKER & TheStreet.com RATINGS GRADE PRIOR MNTH RANK DEC. AVG. DAILY DOLLAR VOL. ($MIL) FEB. TOTAL RET'N (%) 3-MO. TOTAL RET'N (%) 12-MO. TOTAL RET'N (%) 1 SPDR S&P 500 ETF (SPY) C+ 1 27,132.9 -10.75 -17.27 -43.44 2 PowerShares QQQ (QQQQ) C 2 4,937.3 -5.27 -5.32 -35.67 3 ProShares Ultra Short Financials (SKF) C 6 4,605.2 24.14 31.69 49.81 4 ProShares Ultra Short S&P 500 (SDS) B- 3 3,625.8 21.81 28.52 87.28 5 iShares Russell 2000 (IWM) C 4 3,019.8 -11.98 -16.66 -42.27 6 streetTRACKS Gold Trust ETF (GLD) A- 12 2,437.0 1.45 15.34 -3.69 7 DIAMONDS Trust (DIA) B- 5 2,269.8 -11.20 -19.08 -40.68 8 Energy Select Sector SPDR (XLE) C+ 9 1,767.8 -12.33 -17.77 -45.17 9 iShares MSCI Emerging Markets (EEM) C- 8 1,685.8 -6.27 -6.18 -53.22 10 ProShares Ultra Short Real Estate (SRS) E- 16 1,496.7 35.44 -28.59 -21.91 11 Financial Select Sector SPDR (XLF) D+ 10 1,476.4 -17.75 -39.07 -69.39 12 ProShares Ultra S&P 500 (SSO) D 7 1,457.5 -21.09 -34.76 -74.36 13 ProShares Ultra Short QQQ (QID) C+ 13 1,304.3 8.30 -1.75 39.44 14 iShares Dow Jones US Real Estate (IYR) C- 14 1,231.7 -19.78 -22.74 -57.67 15 Direxion Financial Bear 3x Shares (FAZ) U 29 1,209.9 22.88 9.32 N/A 16 iShares MSCI EAFE (EFA) C+ 11 1,199.4 -10.39 -15.83 -50.02 17 United States Oil Fund (USO) E+ 18 1,129.8 -7.43 -35.73 -66.36 18 iShares FTSE/Xinhua China 25 (FXI) C 15 933.4 -3.19 -7.92 -48.79 19 Direxion Financial Bull 3x Shares (FAS) U 23 862.5 -46.57 -84.02 N/A 20 Direxion Large Cap Bear 3x Shares (BGZ) U 34 804.9 30.37 30.71 N/A Source: TheStreet.com Ratings & Bloomberg (Data as of 2/28/2009) For an explanation of our ratings, click here.