If you want market returns, the Dow Diamonds (AMEX:DIA) can get you exposure to the performance of the Dow Jones Industrial Average, but if you are looking for a way to beat the market, the ProShares Ultra Dow30 (AMEX:DDM) ETF might be worth looking at. DDM is designed to achieve twice the daily performance of the DJIA.

Still, in order to achieve its market-beating objective, DDM employs leveraged investment techniques that can expose the fund to potentially dramatic losses in its value.

ProShares, part of ProFunds Group, launched DDM in June 2006, and performance so far is an impressive 19.57%. In comparison, the Dow Diamonds are up just more than 15% for the year. The expense ratio for DDM is 0.95%, well above the very low fee of 0.18% charged by the Diamonds. If DDM continues to perform as well as it has during its brief life, then the extra expense might be well worth it.

A recent issue of Motley Fool Champion Funds noted that DIA beat the iShares Russell 2000 ETF, a proxy for the small-cap universe, by more than six percentage points during the summer months. With all of the talk about how well small caps are doing, large caps are performing quite nicely themselves. When the objective is to double the return of the DJIA, which is large-cap focused, the return potential for DDM is very attractive.

Keeping up with the Dow Joneses
DDM is indexed to the DJIA, which is a price-weighted index that includes 30 large-cap, blue-chip U.S. stocks, and which is widely used as an indicator of overall market performance. The companies in the index are selected to represent the leading U.S. companies in the industries driving the U.S. stock market. These 30 stocks are widely held by investors and have long records of sustained growth. The top five companies include well-known names such as IBM (NYSE:IBM), Boeing (NYSE:BA), AltriaGroup (NYSE:MO), 3M (NYSE:MMM), and ExxonMobil (NYSE:XOM). The heaviest sector weighting in the DJIA, not surprisingly, is focused on industrials, at 24.5%, while consumer non-cyclical comes in at 21.8%, and financials at 15%.

Low on luster
Motley Fools CAPS rates the Dow Diamonds one star only. Although DDM is based on the same index as DIA, there are some big differences between the two funds. DDM has more risk than DIA, or the typical ETF and mutual fund for that matter, and has been in existence for only a short period of time. At the same time, DDM has the potential for higher returns than the Diamonds (an understandable reality, since the higher risk should provide a higher return).

If you are worried that DDM is volatile in down markets, this is a feature you can take advantage of by shorting the fund. Although DDM provides a way to profit on market declines, timing the market is notoriously hard to do and can be a quick and foolish way to lose a lot of money. Only investors comfortable with this type of investing should expose themselves to the risks involved in shorting. For investors who want to be long the market, DDM is a quick and easy way to leverage stock market gains.

What do you think? Click here to rate the ProShares Ultra Dow30 ETF "outperform" or "underperform" relative to the S&P 500.

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Fool contributor Zoe Van Schyndel lives in Miami and enjoys the sunshine and variety of the Magic City. She does not own shares in any of the funds or companies mentioned in this article. 3M is a Motley Fool Inside Value pick. The Motley Fool has a disclosure policy.