Although there is growing tension between Russia and the European Union as well as the U.S. government, the first ETF to track Russia stocks has made its way to Wall Street.
Van Eck Global has introduced the Russia ETF (NYSE: RSX), which is based on a basket of 30 Russian equities, including five New York-listed ADRs, 19 London GDRs and six Russian ordinaries.
The fund is the first single-country ETF to exclusively track the performance of Russian stocks. According to the prospectus, it has an expense ratio of 0.69 percent.
Russia’s seeming return to its old domineering behavior has unnerved some investors. Since Vladimir Putin became president in 2000, Russia has become stronger, and he seems intent on reinforcing Russia’s strength even if it means coming into conflict with Western interests. As a result, some nations charge that Russia should be blocked from acceptance in the World Trade Organization.
Nevertheless, there’s no denying the economic importance of Russia, the world’s 14th largest economy and a resurgent economic powerhouse thanks to booming demand for its enormous reserves of petroleum, natural gas, coal, precious and base metals, diamonds and timber.
“As Russia continues to grow and mature, it will likely assume an increasingly important role in the global economy, and exposure to the country’s markets will be of growing interest to U.S. investors,” says Jan van Eck, principal of Van Eck Global. “As the first ETF listed in the U.S. to target Russia, we believe that RSX will appeal to anyone looking for a convenient means to access the market.”
Ron DeLegge is the San Diego-based editor of www.etfguide.com.