Funds that bet against bull get gored

— -- The bull market started on March 9 — unless you invested in a handful of funds that bet big against it.

The average stock mutual fund has soared 36.7% since the market's first-quarter low, but the 100 worst-performing funds plummeted an average 45.8%.

Usually, a handful of funds make bad bets at the start of a bull market. How did so many fare so poorly?

In most cases, these funds not only bet against a rising market, but bet big. Most of the new bull market's losers are designed to make money only when the stock market falls.

The biggest losers are those that used futures and options — called leverage — to amplify their daily returns. For example, the Rydex Inverse 2X S&P 500 fund has plunged 49.6% since March 9, according to Lipper, which tracks the funds. The Rydex fund is designed to rise 2% when the Standard & Poor's 500-stock index falls 1%, and vice versa.

The more leverage a fund used, the worse its performance was. For example, Direxion offers funds that rise 3% for every 1% the stock market falls. The Direxion Large Cap Bear 3X fund has swooned 66.8% since March 9.

But to get to truly mind-melting losses, you had to offer funds that not only used large amounts of leverage, but that specialized in a single industry.

ProFunds UltraShort Technology, for example, aims to rise 2% for every 1% the Dow Jones technology index falls. It's down 52.2% from the stock market's bottom.

The most utterly ruinous fund combined an industry specialty with leverage: Direxion Financial Bear 3X fund, which rises 3% for every 1% the Russell financial services index falls. The fund has plunged 95.1% since the bull market started.

Direxion markets itself to financial planners, investment advisers and other sophisticated investors. "These investors understand the risks associated with the use of leverage, and are dedicated to actively monitoring their positions in these funds on a daily basis," says Andy O'Rourke, Direxion's marketing director.