Bumpy Road Ahead For The Market Vectors Russia ETF

rocky-road“Investors holding the Market Vectors Russia (RSX) should consider selling out of their positions now. The fund faces challenges in both the short and long term. Aided by heavy energy demand from nations looking to power their economic recovery, RSX rose to become one of the top-performing ETFs in 2009. With central bank officials wary of credit risks and asset bubbles, however, the fund may be in for a slowdown,” Don Dion Reports From The Street.

Dion continues to say, “Last year, thanks to a strong rally in oil prices, investors poured into Russia’s massive energy industry in hopes of riding the global increase in demand. In response to the staggering flow of hot money, the nation’s markets and energy-heavy RSX more than doubled. Today, however, the inflow of investment dollars has central bankers worried that the market may be overheating.”

“The charts don’t look promising either. In the midst of last week’s market selloff, RSX dipped below its 50-day moving average. Previously, this level has proved to be a strong support for the fund. Though it is still early to call this action a definitively negative trend, it may be time for investors to take profits until clearer skies prevail,” Dion Reports.

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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 ( 61.60% OF TOTAL ASSETS)  
 
Company Symbol % Assets
Ak Sberegatelny Bank Sberbank N/A 8.54
Gazprom OAO (EDR) N/A 8.88
JSC Gazprom Neft (ADR) N/A 4.17
JSC VTB Bank GDR N/A 4.69
Lukoil Company ADR N/A 8.27
MMC Norilsk Nickel ADR N/A 4.57
MOBILE TELSYS OJSC (MBT) 3.98
NK Rosneft’ OAO N/A 8.25
Oao Novatek GDR N/A 4.05
Surgutneftegaz OAO (GDR) N/A 6.2

Chart for Market Vectors Russia ETF (RSX)

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