Is Rebounding Russia Ripe for Investment?
Russia’s developed economy is the eighth largest in the world, with a rich array of natural resources: timber, precious metals and fossil fuels. The country’s workforce is highly educated, and its economy is largely privatized. However, many people regard Russia as an unstable market with poor or even punitive business regulations, so Russian stocks tend to trade at a discount. If you want to take advantage of this disparity, you can consider investing in the Market Vectors Russia ETF (RSX).
RSX seeks to replicate, before fees and expenses, the performance of an index of the largest and most liquid Russian companies. Market Vectors defines such Russian companies as those that are incorporated inside the country, generate at least 50% of their revenues inside the nation’s borders or hold at least 50% of their assets in Russia. RSX’s single-country focus also limits its diversification.
This exchange-traded fund (ETF) is down 8.56% for the year, but this actually represents the beginnings of a fantastic recovery, as RSX plunged due to the Crimean dispute with Ukraine. With the Ukrainian situation simmering down, RSX now has climbed above both its 50-day and 200-day moving averages. This ascent also matches historical trends: RSX tends to rise towards the end of the summer. For investors interested in dividends, this fund offers a yield of 2.95%.
Read more about this rebounding Russian opportunity at Eagle Daily Investor.