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), Vale ( VALE), 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), IBM ( IBM), Hewlett-Packard ( HPQ), 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.

For the best-rated exchange traded funds, check out our Top Rated ETFs page.

-- Reported by Kevin Baker in Jupiter, Fla.
Kevin Baker is a senior financial analyst for TheStreet.com Ratings. He had joined Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.