Emerging markets exchange traded funds (ETFs), had a rough week, but Russia seemed to be one of the hardest hit. The Russian RTS index ended down 3.2% on Monday, and is now down 9.6% for the year. This makes Russia the worst performer year-to-date among major global benchmarks.
Polya Lesova of MarketWatch.com adds that falling commodity prices, particularly oils and metal, added to a rush to reduce global risk exposure. This put pressure on the Russian market as well as other emerging markets which tend to have a commodity-driven economy. Other BRIC countries, India, China and Brazil, remain under heavy selling pressure. Insiders to the industry say this market sell-off is following in the patterns of the five previous corrections since 2003.
Central Europe and Russia Closed End Fund (CEE) is down 17.75% for the year, with 45% of the fund in Russia.
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