ETF Spotlight on Market Vectors Russia (RSX), part of an ongoing series.
Assets: $1.7 billion.
Objective: The Market Vectors Russia ETF tries to reflect the performance of the DAXglobal Russia+ Index, which holds publicly traded Russian companies.
Holdings: Top holdings include: Gazprom 8.10%, Rosneft Oil Co. 7.04%, Sberbank of Russia 6.76%, Lukoil 6.64% and Mmc Norilsk Nickel 5.94%.
What You Should Know:
- Van Eck is the fund sponsor.
- RSX has an expense ratio of 0.62%.
- The fund is down 17.51% over the past month, down 29.83% over the last three months and down 31.26% year-to-date.
- The Russian economy is one of the more volatile emerging markets, which “can be partially explained by Russia’s heavy dependence on oil and gas exports, and this fund’s sector weightings reflect this country’s limited economic breadth,” according to Morningstar analyst Patricia Oey.
- “Russia is positioned to benefit from the gradual global economic recovery, and continued development in emerging markets,” she added. “Aside from oil and gas, Russia is also blessed with other types of natural resources, including metals, minerals, and fertile land.”
- Widespread corruption continues to be one of the largest risks in investment in the Russian economy, and many of the larger companies are state-run.
The Latest News:
- Vladimir Putin over the weekend announced his bid for the presidency in March 2012 elections, Reuters reported.
- Russia is undergoing the process of joining the World Trade Organization, but Russia may not join if Putin becomes president and has his way. “We need to bring this to a close as quickly as possible because of Putin becoming president,” an unnamed senior EU diplomat remarked.
- “We think that both the EU and Russia would greatly benefit from Russia’s membership in the WTO,” Finnish European Affairs and Trade Minister Alexander Stubb commented.
- Russian Finance Minister Alexei Kudrin is resigning due to disagreements with President Dmitry Medvedev over the current budgetary and economic policies, according to BBC News.
- The news has ruffled foreign investors as Kudrin has been praised for his economic decisions, more memorably Kudrin’s creation of a special fund that helped save the country’s oil revenue during the financial crisis.
Market Vectors Russia ETF (RSX)
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Max Chen contributed to this article.