Na Zdorovye! Introducing the Market Vectors Russia

On the ETF Trader news front this week, I want to introduce you to a new country-specific fund that just began trading. Its name is the Market Vectors Russia ETF (RSX). This fund just began trading this week and it is managed by Van Eck Global. The company’s aim with RSX is to give investors direct access to a variety of Russian stocks that range from natural resources to communications companies.

This is the first strictly Russian fund to come to the ETF universe. Before the advent of RSX, the best exposure to Russia came in the form of the Claymore BRIC ETF (EEB). Although the EEB ETF is good, it included exposure outside of Russia in countries such as Brazil, India and China. The new Russia ETF is pure Russian through and through.

In fact, the fund is based on the DAXglobal Russia+ Index, which comprises 30 stocks. Those stocks are mostly large cap and either trade on global exchanges or take the form of American Depository Receipts (ADRs). With RSX, you are investing in an oil and gas play, since about 40% of the DAXglobal Russia index contains companies that are heavily involved in natural resources. The new ETF also carries an expense ratio of only 0.69%.

Returns in the DAXglobal Russia+ Index have been stellar of late. Its one-year performance as of March 31, 2007, was 41.36%, while its three-year performance reached 40.32%. For the last five years, the index has posted a sensational 48.30%.

If you were waiting for an easy way to buy into the booming Russian market, now is your chance with the Market Vectors Russia.