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Russia ETFs Attract Flows Despite Sanctions

This article was originally published on ETFTrends.com.

Even with the White House unveiling fresh sanctions against Russia, some investors are embracing the VanEck Vectors Russia ETF (RSX) , the largest Russia exchange traded fund trading in the U.S.

RSX “took in about $20 million last week, the first occurrence of continuous inflows for the fund since January, according to Bloomberg data. One investor traded 250,000 shares worth more than $5.6 million dollars on Friday, data shows,” according to Bloomberg.

RSX has trailed the MSCI Emerging Markets Index over the past year. The ETF and Russian stocks slipped in March after President Vladmir Putin won another term, news that some market observers position Putin to possibly be Russia's leader for life. In late March, President Trump expelled 60 Russian diplomats from the U.S.

Related: 5 Russia ETFs React to Trump Diplomat Expulsion

Of those being expelled, 48 of the alleged intelligence agents work at the Russian embassy in Washington and 12 are posted at the United Nations in New York. The expulsion comes about 15 months after the Obama administration expelled 35 Russian diplomats because of meddling in the 2016 US presidential election.

Russia ETFs Deal With Sanctions

RSX and other Russia ETFs hold some companies that could be affected the new sanctions.

RSX “has over $1.8 billion in assets and its largest holding is Gazprom PJSC, whose head Alexey Miller is among the sanctioned targets. None of the newly sanctioned companies are held by RSX, which includes Sberbank of Russia, which makes up 7.7 percent, and Lukoil PJSC at 7.3 percent,” according to Bloomberg.

Alternatives to RSX, also the most heavily traded Russia ETF, include the iShares MSCI Russia Capped ETF (ERUS) and the VanEck Vectors Russia Small-Cap ETF (RSXJ).

Aggressive, risk-tolerant traders can consider the Direxion Daily Russia Bull 3x Shares (RUSL), which attempts to deliver triple the daily returns of the same index tracked by RSX. The Direxion Daily Russia Bear 3x Shares (RUSS) looks to deliver triple the daily inverse returns of that index on a daily basis.

For more news on Russia ETFs, visit our Russia category.

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