Russia ETF

The BRIC (Brazil, Russia, India and China) countries are considered as the world’s most promising emerging markets. Russia ETF offers investors a convenient and low-cost option to gain exposure to one of the world's top ten economies. Russia has been posting significantly higher growth than that reported by several developed economies. The boom in the economy of Russia, which has extensive deposits of coal, diamonds, timber, crude oil, natural gas and precious and base metals, was triggered by rising commodity prices in 2000.

The only US listed Russia ETFs is Market Vectors-Russia ETF. This ETF was listed on the New York Stock Exchange (NYSE) on April 30, 2007 under the ticker symbol RSX and is focused solely on the Russian market. Market Vectors-Russia ETF tracks the performance of the DAXglobal Russia + Index. This index comprises of the 30 most heavily traded Russian securities listed either through an American Depositary Receipt (ADR), a Global Depository Receipt (GDR) or local Russian shares. This Russia ETF has limited ties to the US stock index. Thus, it acts as one of the good ways to diversify a portfolio and add international focus.

Some of the securities in the Market Vectors-Russia ETF are:

· Surgutneftegaz (SGTZY)

· OAO Gazprom (OGZPY)

· Rosneft Oil

· Lukoil (LUKOY)

· MMC Norilsk Nickel (NILSY)

· Mobile Telesystems (MBT)

· Vimpel Communications (VIP) and

· Wimm-Bill-Dann Foods (WBD)

As the Market Vectors-Russia ETF is mainly focused on commodity producing companies, the fund can be considered as an equity-based commodities play.

On a sector basis, the Market Vectors-Russia ETF is not a diversified fund, as it is heavily inclined towards energy stocks. As of May 2009, the underlying index had the following features:

· oil, gas, and other energy holdings accounted for 45% of the index

· industrial materials stocks made up 18% of the index

· the telecommunications sector accounted for more than 14% of the index

Thus, the Market Vectors-Russia ETF is a good option for those investors who are optimistic about the natural gas and crude oil prices and find the overall energy sector attractive.