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If an ETF investor believes a) the March surge was the start of a new bull market; and b) the first ones out of the starting gate are likely to lead the pack later on, he or she ought to consider the iShares FTSE/Xinhua China 25 ( FXI), the Financial Select Sector SPDR ( XLF) and the iShares MSCI Emerging Markets ( XLF) exchange-traded funds.

Those China, financial and emerging-markets ETFs, along with the PowerShares QQQ ( QQQQ), rang up double-digit percentage gains last month to lead the non-leveraged funds on the accompanying tabulation of the 20 most popular ETFs, as measured by daily average dollar volume of trading.

TheStreet.com Ratings

The popularity of leveraged ETFs appears to have waned. Only seven of the top 20 ETFs are leveraged, one fewer than a month earlier. Only five of the geared ETFs are "inverse" funds, down from six "short" ETFs in February.

Moreover, the buoyant stock market seems to have dampened enthusiasm for super-leveraged ETFs. Three Direxion "3x" (tripled leveraged) funds that made the top 20 in February are absent from this month's roster.

As has been the case in recent months, the SPDR S&P 500 ETF ( SPY) tops the list of the 20 most popular ETFs. The fund's top holdings include blue chips Exxon Mobil ( XOM), General Electric ( GE), AT&T ( T) and Microsoft ( MSFT).

Retaining its hold on the second position on the list, the PowerShares QQQ, which gained 10% during the month, was traded at an average daily pace of $5 billion in March.

The fund holds the 100 largest Nasdaq-listed stocks, which, in addition to Microsoft, include Apple ( AAPL), Qualcomm ( QCOM) and Google ( GOOG).

Most Popular ETFs in March
RANK, NAME, TICKER & TheStreet.com RATINGS GRADE
PRIOR MNTH RANK
MARCH AVG. DAILY DOLLAR VOL. ($MIL)
1-MO. TOTAL RET'N (%)
3-MO. TOTAL RET'N (%)
12-MO. TOTAL RET'N (%)
1 - SPDR S&P 500 ETF (SPY) C+
1
29,011.9
8.35
-11.23
-38.15
2 - PowerShares QQQ (QQQQ) C
2
4,990.3
10.32
2.12
-30.34
3 - ProShares Ultra Short S&P 500 (SDS) B-
4
4,885.6
-19.67
11.79
49.86
4 - ProShares Ultra Short Financials (SKF) C
3
4,189.9
-44.81
-4.71
-16.32
5 - iShares Russell 2000 (IWM) C-
5
2,922.5
7.77
-14.31
-37.37
6 - DIAMONDS Trust (DIA) B-
7
2,511.9
7.44
-12.56
-36.11
7 - SPDR Gold Shares ETF (GLD) B+
6
2,419.2
-2.54
4.35
-0.14
8 - Financial Select Sector SPDR (XLF) D+
11
1,892.9
17.15
-28.89
-63.03
9 - iShares MSCI Emerging Markets (EEM) C-
9
1,745.4
16.86
-0.64
-43.19
10 - ProShares Ultra S&P 500 (SSO) D
12
1,741.5
14.57
-24.50
-69.70
11 - Energy Select Sector SPDR (XLE) C+
8
1,691.8
3.78
-10.64
-41.73
12 - ProShares Ultra Short Real Estate (SRS) C
10
1,650.5
-34.22
4.22
-42.23
13 - ProShares Ultra Short QQQ (QID) C+
13
1,486.6
-22.59
-15.43
13.73
14 - iShares MSCI EAFE (EFA) C+
16
1,167.0
8.39
-16.21
-46.06
15 - United States Oil Fund (USO) E+
17
1,109.4
7.39
-12.24
-64.29
16 - iShares Dow Jones US Real Estate (IYR) C-
14
1,077.2
3.52
-30.10
-58.05
17 - ProShares Ultra Short Dow 30 (DXD) B-
23
990.5
-18.12
17.85
50.30
18 - iShares FTSE/Xinhua China 25 (FXI) C
18
982.0
17.36
-1.93
-35.41
19 - SPDR Mid Cap 400 (MDY) C
25
951.6
8.31
-8.46
-36.25
20 - ProShares Ultra QQQ (QLD) D
24
944.2
19.94
0.45
-61.37
Source: TheStreet.com Ratings & Bloomberg (Data as of 3/31/2009).

For an explanation of our ratings, click here.

Disclosure: The writer holds long-term positions in QQQQ, FXI and XLF in a retirement account.
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.