Investors Flee Leveraged Bear Funds as Stocks Rise

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Stocks gained momentum in April, damping demand for exchanged-traded funds that move opposite the market.

Only one "inverse-leveraged" fund ranked among the 10 most-popular ETFs in April based on daily average dollar volume, down from two in March, according to TheStreet.com Ratings. Four ProShares UltraShort ETFs were among the top 15 in March, but only two made the list in April.

Investors fled inverse-leveraged funds, which are designed to fall as stocks rise, as the S&P 500 Index advanced 9.4% last month. These funds have also proved to be unreliable for anything other than short-term hedges and speculative trades. The ProShares UltraShort Dow 30 ETF(DXD Quote), which should have lost more than 10% this year, is down 3.7%.

The SPDR S&P 500 ETF(SPY Quote) was the most-popular ETF for April. Its top holdings include blue chips Exxon Mobil(XOM Quote), General Electric(GE Quote), AT&T(T Quote) and Microsoft(MSFT Quote).

The No. 2 fund, PowerShares QQQ(QQQQ Quote), climbed 13% during the month. The fund holds the 100 largest Nasdaq-listed stocks, which includes Apple(AAPL Quote), Qualcomm (QCOM Quote) and Google(GOOG Quote).

Most Popular ETFs in April RANK, NAME, TICKER & TheStreet.com RATINGS GRADE PRIOR MNTH. RANK APRIL AVG. DAILY DOLLAR VOL. ($MIL) 1-MO. TOTAL RET'N (%) YR.-TO-DATE TOTAL RET'N (%) 12-MO. TOTAL RET'N (%) 1 SPDR S&P 500 ETF (SPY) C+ 1 31,620.6 9.94 -2.42 -35.10 2 PowerShares QQQ (QQQQ) C 2 4,584.4 13.06 15.46 -27.06 3 ProShares Ultra Short S&P 500 (SDS) C+ 3 4,208.0 -19.70 -10.23 33.67 4 iShares Russell 2000 Index Fund (IWM) C 5 3,630.1 15.39 -1.13 -30.88 5 Financial Select Sector SPDR Fund (XLF) D+ 8 2,893.8 21.79 -13.39 -57.92 6 ProShares Ultra S&P 500 (SSO) D 10 2,515.8 20.32 -9.15 -66.66 7 iShares MSCI Emerging Markets Index Fd (EEM) C 9 2,285.7 15.56 14.82 -39.85 8 DIAMONDS Trust (DIA) C+ 6 2,156.1 7.87 -5.68 -34.28 9 Direxion Financial Bull 3x Shares (FAS) U 25 1,962.2 47.82 -68.00 N/A 10 ProShares Ultra Short Financials (SKF) E+ 4 1,758.3 -41.92 -44.66 -43.45 11 SPDR Gold Shares ETF (GLD) B+ 7 1,753.7 -3.33 0.87 0.72 12 Energy Select Sector SPDR Fund (XLE) C+ 11 1,749.7 7.82 -3.65 -43.09 13 iShares MSCI EAFE Index Fund (EFA) C+ 14 1,437.3 11.52 -6.55 -42.95 14 iShares Dow Jones U.S. Real Est. Index Fd (IYR) C- 16 1,352.1 29.62 -9.39 -48.61 15 iShares FTSE/Xinhua China 25 Index Fd (FXI) C+ 18 1,237.4 12.09 9.94 -38.38 16 ProShares Ultra QQQ (QLD)D 20 1,173.6 26.32 26.89 -57.78 17 iShares MSCI Brazil Index Fund (EWZ) C 22 1,009.4 19.63 28.89 -47.37 18 ProShares Ultra Short QQQ (QID) C- 13 974.5 -23.49 -35.29 2.34 19 ProShares Ultra Short Dow 30 (DXD) C+ 17 828.9 -15.23 -0.09 40.35 20 HOLDRS Oil Services Trust (OIH) D 24 827.9 21.75 23.13 -53.40 Source: TheStreet.com Ratings & Bloomberg (Data as of 4/30/2009). For an explanation of our ratings, click here..