After being the stars of the exchange traded funds tracking BRIC nations in 2014, India ETFs are extending that momentum in 2015.
For example, the WisdomTree India Earnings Fund (NYSEArca: EPI), the largest India ETF, is higher by nearly 10% this year. India ETFs are in rally mode again Friday in anticipation of Prime MinisterNarendra Modi’s first budget.
Risk-tolerant traders can exploit the momentum in India ETFs with the Direxion Daily India Bull 3X Shares (NYSEArca: INDL), which attempts to deliver three times the daily performance of the Indus India Index. Once overlooked relative to other leveraged ETFs, INDL is shedding its anonymous status.
Up nearly 30% to start 2015, INDL has seen its assets under management tally soar 21% to $93 million since the start of December. [India ETF Adventure]
That says INDL is starting to attract its share of inflows to India ETFs and that is a positive at a time when those inflows appear poised to eclipse last year’s brisk pace. In 2014, investors allocated $2.8 billion to India ETFs and that number is already $1 billion this year, according to Morgan Stanley. [India ETFs Lead BRICs Again]
“India, the emerging market equity darling right now, is showing the largest positive risk-adjusted return across regions and assets. Following the release of a government survey that called for “big-bang” reforms in Prime Minister Narendra Modi’s first full-year budget tomorrow, the various proxies that measure risk or sentiment are all cooperating–that is, the engineering and construction sector closed at a seven year high, equity volatility finally turned down ahead of this event, and the Indian rupee (INR) is showing the largest positive risk-adjusted return in FX as it is stronger relative to all G10 currencies,” said Rareview Macro founder Neil Azous in a note out Friday.
Volume has been steadily increasing in INDL. For the five days ending Feb. 26, INDL’s volume was, on average, 18.6% higher than the trailing 20-day average.
Although Indian stocks are often viewed as volatile, even by the standards of emerging markets equities, INDL has done a commendable job of not wildly deviating from three times the daily returns of the Indus India Index over the past month. Over that period, the difference between INDL’s performance and three times the Indus India Index is just -0.39%, according to Direxion data.
Direxion Daily India Bull 3X Shares