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Investors Flee Leveraged Bear Funds as Stocks Rise

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

TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.


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


, according to 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


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%.



(SPY) - Get Report

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

Exxon Mobil

(XOM) - Get Report


General Electric

TST Recommends

(GE) - Get Report



(T) - Get Report



(MSFT) - Get Report


The No. 2 fund,

PowerShares QQQ


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


(AAPL) - Get Report



(QCOM) - Get Report



(GOOG) - Get Report


Richard Widows is a senior financial analyst for Ratings. Prior to joining, 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.