From a dramatic rise to the world’s biggest drop

From a dramatic rise to the world’s biggest drop

From a dramatic rise to the world’s biggest drop Rise and falls are rarely as dramatic as this.

A small exchange traded fund which focuses on stocks in Brazil enjoyed a dramatic surge, rising 175 per cent over a six-week period: only to then suffer what has been reported as “the world’s biggest drop”.

According to Bloomberg, the $51.6 million Direxion Daily Bull Brazil 3X Shares ranked at the top of ETFs of at least $50 million in the US from January 26, all the way through to last week. However, at that point, the ETF, which focuses on leverage to enjoy triple daily gains and losses on assets, managed to plummet by an attention-grabbing 26 per cent: making it the worst performer within the group.

Its fall was prompted by investors adopting a bearish attitude towards the stock market in Brazil. Volatility within the country is at its highest levels for more than 12 months with investors attempting to gauge whether a potential new government in the country would be better placed to pull it out of recession. Stocks, currency and bonds in the country all enjoyed gains as speculation mounted about an investigation into corruption drawing closer to the country’s administration – however, it has since slipped as President Dilma Rousseff appears to be closer to maintaining his grip on power.

Still, Brazil is enjoying a great deal of attention overall: according to Bloomberg, investors have pushed around $244 million into ETFs which track stocks in Brazil during the year so far. This gives Brazil by far the biggest inflows among emerging nations.