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Stock Slump? ETF Climbs 30% This Year

NEW YORK ( TheStreet) -- The 10 best-performing exchange traded funds this year bet on a stock-market decline using leverage, or borrowed money.

The 300% inverse leveraged Direxion Daily Latin America Bear 3X Shares (LHB) beat all others in January, jumping 36%. Despite a drop so far this month, the ETF is still up 30% since Jan. 1.

The Direxion ETF tracks the opposite trajectory of the S&P Latin America 40 Index, with weightings of 61% toward Brazilian equities, 25% Mexico, 10% Chile, 2% Argentina and 1% Peru. The fund is only two months old, has attracted $6.4 million in total assets and averages a trading volume of almost 10,000 shares a day.

Seven times as actively traded is the seven-month-old ProShares UltraShort MSCI Brazil (BZQ), which turned in a second-place performance of 31% in January. As leading Brazilian stocks like Petrobras (PZE - Get Report), Vale (VALE - Get Report), Itau Unibanco (ITUB) and Ambev (ABV) sank like BRICs, the ETF cleaned up with 200% inverse leverage.

Eleven times as popular, at an average trading volume of 776,000 shares a day, the Direxion Daily Technology Bear 3X Shares (TYP) attempts to track negative 300% of the daily performance of the Russell 1000 Technology Index. The index is heavily weighted toward tech-giants Microsoft (MSFT - Get Report), IBM (IBM - Get Report), Hewlett-Packard (HPQ - Get Report), EMC (EMC) and Texas Instruments (TXN).

Skipping past 40 inverse ETFs and one market-neutral ETF, the two sweetest spots among bullish exchange traded funds in January was reserved for sugar and banking. The iPath Dow Jones-UBS Sugar Subindex Total Return ETN (SGG) gained 11% in one month and 90% over 12 months. SPDR KBW Bank ETF (KBE) rose 9.1%. the iShares Dow Jones US Regional Banks Index Fund (IAT) climbed 8.8%. And the SPDR KBW Regional Banking ETF (KRE) advanced 8.2% on TARP-repayment euphoria and the path to further financial industry regulatory reform getting more challenging upon the election of a 41st Republican, Scott Brown of Massachusetts to the U.S. Senate.
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HPQ $12.12 -1.20%
IBM $145.29 -0.45%
MSFT $50.61 1.50%
PZE $6.45 0.16%
VALE $5.65 -0.35%


Chart of I:DJI
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S&P 500 2,081.43 +16.13 0.78%
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