Russian equities have outperformed the S&P 500 by 3% in the last month, so the timing of a new exchange traded fund (ETF) from State Street aimed at the Russian economy seems especially good.
SPDR S&P Russia (NYSEArca: RBL), which competes directly with the popular Market Vectors Russia (NYSEArca: RSX). State Street noted that it created this ETF to give investors the chance to fine-tune their BRIC (Brazil, Russia, India, China) exposure.
Like RSX, RBL’s heaviest weighting is toward the energy sector, at 49%. Other top sectors in the fund are materials (17.9%), financials (11.7%) and telecommunications (8.7%).
Meanwhile, the Russian ruble has been on a tear that, if it continues, could change the economy in some key ways. Owen Vater for TickerSpy says a powerful ruble could lead to interest rate cuts and a further rebound of the country’s largely commodity-tied equity sector. [Russia Diversifies Beyond Oil.]
Russian equities were cited as the most robust economic profile late last year, and many analysts were feeling bullish toward Russian equities. The ruble is now at 14-month highs versus a euro-dollar basket; that could help bring Goldman’s forecast of Russia as a top trading idea this year to fruition if the Russian central bank gets out the scissors. [Russia’s Central Bank Lends a Hand.]
Russian stocks and the ADR index that are U.S.-listed have outdone the S&P 500 by 3% over the past month. Market watchers are waiting to see if the recent momentum is for the long haul, or just a flash in the pan. Watch those trend lines and act accordingly. [Our Guide to the BRICs.]
For more stories about Russia, visit our Russia category.
- Market Vectors Russia (NYSEArca: RSX)
- CurrencyShares Russian Ruble Trust (NYSEArca: XRU)
Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.