There Is Still Time To Jump On Board With This Russian ETF (RSX)
”There are great many thoughtful investors who think that Russia is worth a flutter – they maintain that it has been unfairly maligned by a western investor community applying double standards. They quite rightly point out that many of the worst practices that Russia stands accused of are a great deal worse across the border in China – but everyone ignores the latter’s systemic issues because it is “the next big thing”. Russia is just regarded as a post-superpower,” David Stevenson Reports From Financial Times.
“I do know what they mean. In Russia, state interference in private property rights is not that frequent and tends to be focused on bringing oligarchs to heel. In China, all it takes is for the CCP to snap its fingers and decide that it doesn’t like the boss of Company Y and, hey presto, your equity is worth nothing! Even so, Russia is still risky and its government’s love of geopolitical grandstanding and threat-based international diplomacy hardly inspires confidence,” Stevenson Reports.
“So, when deciding whether to invest, there are arguments on either side: many cheap companies with phenomenal global market positions in resource sectors, and a growing consumer sector, versus regulatory risk and a lax attitude towards debt repayment. I’ve stayed away from Russia until now – and arguably missed one of the biggest bull bounces in history. However, I am now tip-toeing into the market in a small, controlled manner. How, then, should adventurous types gain exposure,” Stevenson Reports.
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“You can buy simple beta via Russia exchange traded funds (ETFs) from Lyxor and Deutsche Bank, which have total expense ratios of between 50 and 70 basis points. These ETFs tend to track indices that follow the very largest of the Russian listed companies – and this focus on mega-caps and momentum can be a strength or a weakness. Large Russian companies are the ones that the Kremlin cares the most about and will probably interfere with,” Stevenson Reports.
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We have listed some information on the Market Vectors Russia ETF (RSX) below:
The investment (RSX) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the DAXglobal® Russia+ Index. The fund invests at least 80% of assets in stocks and Depositary Receipts of publicly traded companies domiciled in Russia. It normally invests at least 95% of assets in securities that comprise the index. The fund is nondiversified.
| TOP 10 HOLDINGS ( 60.84% OF TOTAL ASSETS) |
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