Investors Flee Leveraged Bear Funds as Stocks Rise

Stocks gained momentum in April, damping demand for ETFs that move opposite the market.
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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.

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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) - Get Report

, which should have lost more than 10% this year, is down 3.7%.

The

SPDR S&P 500 ETF

(SPY) - Get Report

was the most-popular ETF for April. Its top holdings include blue chips

Exxon Mobil

(XOM) - Get Report

,

General Electric

(GE) - Get Report

,

AT&T

(T) - Get Report

and

Microsoft

(MSFT) - Get Report

.

The No. 2 fund,

PowerShares QQQ

(QQQQ)

, climbed 13% during the month. The fund holds the 100 largest Nasdaq-listed stocks, which includes

Apple

(AAPL) - Get Report

,

Qualcomm

(QCOM) - Get Report

and

Google

(GOOG) - Get Report

.

Richard Widows is a senior financial analyst for TheStreet.com Ratings. Prior to joining TheStreet.com, Widows was senior product manager for quantitative analytics at Thomson Financial. After receiving an M.B.A. from Santa Clara University in California, his career included development of investment information systems at data firms, including the Lipper division of Reuters. His international experience includes assignments in the U.K. and East Asia.