After being leaders through most of last year and the early part of 2015, Indian stocks and the corresponding exchange traded funds have been emerging markets laggards in recent weeks, but that has not stopped some traders from betting on a rebound by the Direxion Daily India Bull 3X Shares (NYSEArca: INDL).
Slack earnings and uncertainty regarding taxes on foreign investors are among the issues that have recently hindered Indian stocks. Still, there are some green shoots. For example, the International Monetary Fund projects that India’s economy will expand at a 7.5% rate, up 1.2 percentage points from January’s forecast, potentially outpacing China’s expansion for the first time since 1999.
On Monday, traders allocated $32 million to the lone leveraged India ETF. From the start of December through the end of February, INDL’s assets management surged 21% to $93 million. From Feb. 27 through April 24, INDL added nearly $14 million in new assets. [Living Large With a Leveraged India ETF]
Monday’s big bets on INDL, equivalent to just a under a third of the ETF’s AUM total entering the day, arrived despite the ETF dropping 16.2% over the past month. INDL, which attempts to deliver three times the daily performance of the Indus India Index, is the third-worst performer this month among Direxion’s bullish triple-leveraged ETFs.
Monday’s buying in INDL came on volume that was more than double the three-month daily trailing average, extending a trend of elevated turnover in the ETF in recent days. Over the past five days, INDL’s average volume has been more than double the trailing 20-day average, according to Direxion data.