Investors' Favorite ETFs in June

Deleveraging is one of the biggest themes so far in 2008, but traders in exchange-traded funds seem to be defying that trend. Five of the 20 most popular ETFs in June were of the leveraged variety.

But to their credit, the ETF set showed a distinct attraction to "short" leveraged funds that move opposite the market at exaggerated amplitudes during the month just ended. Most "long" investors, on the other hand, would have been happy if June had never happened.

In the accompanying table of the 20 most popular ETFs in June, as measured by average daily dollar volume of trading, seven funds bucked the tide of selling. Three were "Ultra Short" entries from ProShares that move opposite the market at accelerated velocities. They were kept company in the plus column by three energy ETFs and a gold fund.

Less fortunate were a pair of ProShares "long" leveraged funds, the ProShares Ultra QQQ(QLD Quote) the ProShares Ultra Financials(UYG Quote). The pair aptly demonstrated the downside of leverage, as the QLD suffered a setback of 18.92% for the month, almost double the loss of its unleveraged counterpart, the PowerShares QQQ(QQQQ Quote), which retreated 9.64%. ...