3 Leveraged Emerging Markets Traders Should Consider In Q1

International stocks will again lag their U.S. rivals in 2019, but that could change in 2020. That means the stage could be set for marquee ex-US benchmarks, such as the MSCI Emerging Markets Index, to rally in the first quarter.

If an international equity market rally materializes in the first quarter, active traders may want to consider leveraged exchange-traded funds to capture added upside.

“International stocks are poised for a 2020 comeback to some degree, they’ve been beaten up due to lack of economic growth, strong dollar, trade war and other factors,” said Direxion Managing Director Sylvia Jablonski. “However, world banks began strong stimulus, and we are seeing some of the manufacturing hits and slowdown, relent. If we see a trade resolution, this further boosts the argument. While the US has outperformed International and EM for the past decade, with US valuations at all-time highs, investors would like to find some new ideas. Those may come in the form of broad-based international and emerging markets exposure, and also sector-specific, in places like China.”

With that in mind, here are a few leveraged emerging markets ETFs traders may want to consider at the start of the new year.

Direxion Daily MSCI Emerging Markets Bull 3X Shares (EDC)

The Direxion Daily MSCI Emerging Markets Bull 3X Shares looks to deliver triple the daily returns of the MSCI Emerging Markets Index. That index has recently shown signs of life, jumping almost 4% this month.

Recent data suggest fund managers have been stepping into developing world equities and there are other reasons to consider EDC for a quick trade in the first quarter.

“Accommodative fed and investors searching for yield might drive em stocks. Asia and India, in particular, are reinvesting into their respective economies,” said Jablonski. “Chinese stocks should benefit from china financial liberalization and increased weighting of A-shares in the MSCI Emerging Markets Index.”

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