Is the risk worth the potential reward when it comes to investment in Russia and its exchange traded fund (ETF)?

Russia has become a leader in Eastern Europe, and living standards there have vastly improved, according to a report from Research and Markets. Its increasing market size has been attracting increasing interest from foreign investors.

With a growth rate of 8% for 2007-08, Russia appears to have a lot going for it: vast energy, mineral and timber reserves, giving it the qualities that investors admire, reports Zoe Van Schyndel for The Motley Fool.

Market Vectors Russia Fund (RSX) also makes it easy to access Russian companies that are inaccessible on any U.S. exchange. The latest commodities boom has influenced the performance of RSX, with 40% invested in oil and gas and another 22% given to the iron and steel sector. The downside, though, is that the fund is heavily influenced by political events – something to which Russia hasn’t been a stranger lately.

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