ETF Trends
ETF Trends

The escalation of the Georgia-Russia conflict, which took a turn for the worse this morning, could do harm to the Russian exchange traded fund (ETF) if it continues.

Georgia launched an offensive in a breakaway region, and in retaliation, Russia sent in tanks, reports Renee Montagne for NPR. In Washington, calls were made for an immediate cease-fire, and a U.S. envoy is on the way to the region. Georgia is a staunch U.S. ally.

The region in debate, South Ossetia, is key to the Georgian president’s power. The country seeks to end South Ossetia’s independence, which it won in a 1991-92 war. Most of its residents have Russian citizenship.

Market Vectors Russia (RSX) is down sharply this morning, by nearly 5%. The long-term impact of this conflict remains to be seen, but they’re losses the fund doesn’t need. After a strong start to the year, it’s now 27.9% off its May 19 high, and down 17.1% year-to-date.

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.