ETF Trends
ETF Trends

The Russian economy is shifting leadership while the economy is booming under Vladimir Putin’s hand, with the focused exchange traded fund (ETF) on a run. But can it sustain momentum under the next President?

Gleb Bryanski for Reuters says Russian officials are ecstatic over the economic achievements of Putin’s office over the past 8 years, with high economic growth and investment rates.

But one of his last acts before stepping down, Putin signed a law placing limits on foreign investment within key sectors of the Russian economy. The law terms state that any private foreign company wanting to buy more than 50% of a company in any of the 42 strategic sectors will need authorization from a commission made up of economic and security officials, reports Thompson Financial News.

The challenge for Dmitry Medvedev is going to be sustaining the economic growth, which could turn out to be a headache. Growth rates are showing signs of faltering and inflation is ticking up. Medvedev’s commitment to reform is still a question mark among many Russians, and he hasn’t disclosed much in the way of economic policy.

Market Vectors Russia (RSX) would be in a position to benefit if Medvedev manages to keep Russia on a growth course. Year-to-date, the fund is down 0.7%. The Central Europe and Russia Fund (CEE), a closed-end fund, could also benefit. Year-to-date, it’s down 12.2%, and it’s 27.7% allocated in Russia.


The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.