The Direxion Daily FTSE China Bull 3X Shares ETF (YINN) soared a staggering 24.15% in pre-market trading on Monday, fueled by a renewed frenzy of hedge fund buying interest betting on a swift recovery in China's equity market and economy.
Hedge funds have been aggressively piling into Chinese stocks and exchange-traded funds at a record pace in September, making record net purchases led by equities in China and Hong Kong, according to data from Goldman Sachs' prime brokerage. This buying spree comes as Beijing unleashes an extensive package of stimulus measures and policy support aimed at reviving the nation's struggling economy.
Major US and global funds have been entering bullish positions on China, including Pennsylvania-based Mount Lucas Management entering call spreads on companies like JD.com and gaining exposure via China ETFs. Singapore's GAO Capital and Australia's Tribeca Investment Partners have also been snapping up large-cap Chinese stocks and mining companies that stand to benefit from China's economic growth.
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