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Russia is the world's largest country in terms of territory. Its consumer market consists of over 140 million people. It has vast resources, a highly educated workforce, and technologically advanced research and production capabilities. Still, Russia's economic potential remains largely untapped. Many investors shy of Russia amid growing concerns that the political system in the country is breeding dissent among the population.

As such, the economy has been in a state of flux in recent months and its close proximity to Europe amid the financial crisis remains a pivotal danger. However, none of these things change what Russia has to offer. Its technological capabilities matched with its natural resources give the country's economy great potential. Political turmoil will only drive prices down, making it a better time to invest in this country.

Poland's economy is much smaller than that of Russia. However, with a strong consumer market of 38 million, it is still one of the biggest markets in Europe. The country benefits greatly from its geographical location, which makes it possible to export goods to all European countries and thus reach over 500 million consumers. Similar to Russia, Poland has a highly educated workforce. Therefore, Poland also falls victim to its proximity to Europe and the ongoing crisis.

For these reasons many investors are also shying away from this nation. In these trying times though, Europe still remains a solid economy, and though it has faltered, it has managed to remain intact. As investors flee Europe amid growing concerns over the failure to revive the economy and provide successful solutions, Poland offers a great bargain.

The iShares MSCI Emerging Markets Eastern Europe Index ETF (NYSEARCA:ESR) provides exposure to both Russia and Poland. Russian companies constitute approximately 78.4% of the fund's holdings, with Polish companies constituting approximately 13.6%. Some of the fund's top holdings include Russia's Gazprom, Lukoil, and Sberbank. The fund's returns have fluctuated greatly over the past year, which is to be expected, given the situation in Europe. However, with an annual yield of over 4%, this fund is set up for an undervalued long-term play.

The iShares MSCI Russia Capped Index ETF (NYSEARCA:ERUS) provides 100% exposure to Russia. Similar to ESR, its top three holdings are Gazprom, Lukoil, and Sberbank. Approximately 54% of the fund's holdings are in the energy sector. The fund's returns trend are very similar to ESR and the fund also shares a similar yield. For those looking to skip out on the other European markets and invest solely in Russia, this fund also provides undervalued long-term exposure.

The iShares MSCI Poland Investable Market ETF (NYSEARCA:EPOL) provides 100% exposure to Poland, foregoing exposure to Russia altogether. This provides an opportunity to invest in a smaller market free of political tensions. Differing from ERUS, the majority of this fund's holdings are in the financials sector. However, the performance in terms of returns falls under a similar pattern as ESR and ERUS. This fund also has a slightly lower yield than its Russian counterparts. Still, this fund provides exposure to the Polish market at a good value.

As Europe continues to dismay investors in dealing with the economic crisis, Eastern European countries such as Russia and Poland are stepping into the limelight and showing their strength. As they weather the storm ahead of their more developed counterparts, these nations are providing investors with a golden opportunity.

Source: The Case For Russia And Poland