With U.S. Federal Reserve rate cuts looming, emerging markets (EM) are garnering interest from capital markets. This gives traders various options when looking at profitable opportunities in the EM space.
Bloomberg reported that EM assets have been heading higher as of late as “traders began to price in greater odds of a half-point interest rate cut by the Federal Reserve, fueling risk appetite across the globe.”
“The MSCI gauge tracking developing-world currencies rose 0.5% on Friday [September 13] to cap off its seventh-straight week of gains,” the report added. The report further noted the recent move ended a two-week losing streak.
On that note, traders may want to take a look at the Direxion Daily MSCI Emerging Markets Bull 3X Shares (EDC). EM equities can be susceptible to volatility, especially when taking into account the ebbs and flows of the U.S. dollar. That said, traders can protect themselves from the downside with the Direxion Daily MSCI Emerging Markets Bear 3X ETF (EDZ). It provides inverse exposure to EDC, giving traders the flexibility to profit in emerging markets regardless of whether EM equities head up or down.
Other Emerging Markets Opportunities
Traders who want more concentrated exposure have other options in the EM space. In particular, Direxion offers country and regional exposure in other parts of the globe, giving traders additional opportunities.
China, in particular, offers myriad possibilities for short-term traders. For bullish trends, traders can use the Direxion Daily FTSE China Bear 3X Shares (YANG). The fund seeks daily investment results equal to 300% of the inverse of the daily performance of the FTSE China 50 Index. Likewise, if China equities fall, they can take the other side of the trade with the Daily FTSE China Bull 3X Shares (YINN).
India’s economy is fast-rising, giving traders opportunities in the Direxion Daily MSCI India Bull 2x ETF (INDL). The fund seeks daily investment results equal to 200% of the performance of the MSCI India Index. That index measures the performance of the large- and midcap segments of India’s equity market. It covers approximately 85% of companies in India’s equity universe.
Latin America’s economy is also primed for growth, which opens up possibilities in the Direxion Daily Latin America Bull 3X ETF (LBJ). The fund seeks daily investment results equal to 300% of the daily performance of the S&P Latin America 40 Index. This index is a float-adjusted market capitalization-weighted equity index of issuers drawn from five major Latin American markets: Brazil, Chile, Colombia, Mexico, and Peru.
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