With a U.S. presidential election just weeks away, the timing of conversations regarding almost anything related to Russia is, well, interesting to put things delicately.

What Happened: Controversy and conjecture aside, adventurous traders may want to give the Direxion Daily Russia Bull 2X Shares (NYSE: RUSL) a look. The often volatile RUSL tries to deliver double the daily performance of the MVIS Russia Index.

Like any leveraged exchange-traded fund, RUSL isn’t for the faint of heart, but that sentiment is particularly true of this product, which had its leverage reduced to 2x from 3x earlier this year. Additionally, RUSL indicates 2020 has been unkind to Russian markets as highlighted by a year-to-date decline of 78.26%.

Why It’s Important: Don’t write RUSL’s obituary quite yet. Opportunity with the geared Russia ETF could be afoot, particularly if the commodities markets show some signs of life.

“While individual stocks have contributed to the growth of RUSL in recent weeks (like internet firm Yandex, which has surged thanks to broad enthusiasm for tech stocks and its potential inclusion to the MSCI Russia Index), the broad performance of the ETF’s underlying MVIS Russia Index can be chalked up to rising natural gas and mineral prices that have benefitted the country’s vast array of energy and mining companies,” according to Direxion research.

With RUSL, traders are essentially making leveraged bets on energy and materials names – two sectors that account for small percentages of domestic equity benchmarks, but ones that loom large in Russia. Those sectors combine for over 63% of RUSL’s underlying index.

What’s Next: For those considering RUSL, a positive is that there is still some global appetite for oil and natural gas. Yes, the U.S. and Europe are leading green energy revolutions, but other countries still need fossil fuels.

“On the energy front, Russia’s two largest natural gas firms are both experiencing a resurgence in their share price thanks to a steep rebound in LNG prices of almost 50% following a July lull,” notes Direxion. “State-owned Gazprom and privately-owned Lukoil have generally moved in sympathy with the fluctuating natural gas market, which in mid-August broke well above the $2.20 level it had traded under since January.”

Additionally, gold and palladium prices could act as tailwinds for RUSL due to the fund’s exposure to miners of those two marquee precious metals.

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