Oligarchs See Value in Holdings of Russia ETFs

Heading into Thursday’s trading session, the Market Vectors Russia ETF (NYSEArca: RSX) was down 18.8% this year, easily making the largest Russia ETF the worst performer among the four major single-country ETFs tracking BRIC nations.

To paint a picture of just how poorly Russian stocks have performed in 2014, RSX’s year-to-date loss is great than the losses incurred by the iShares China Large-Cap ETF (NYSEArca: FXI) and the iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) COMBINED.[Brazil ETFs Stumble]

Although Russian equities have come under increased pressure in the wake of the country’s invasion of Ukraine, President Vladimir Putin has recently been able to assuage markets that the annexation of Crimea is enough and that his country has no plans to acquire additional territory.  [Russia ETFs Deal With Putin]

That has allowed RSX and rival ETFs such as the iShares MSCI Russia Capped ETF (NYSEArca: ERUS) and the SPDR S&P Russia ETF (NYSEArca: RBL) to rally in the past week, stoked by buying of inexpensive Russian stocks by Russian oligarch investors.

Vagit Alekperov, CEO of Russian energy giant OAO Lukoil, has stepped up his purchases of his company’s shares, reports Halia Pavliva for Bloomberg. Alekperov is not alone. OAO Novatek bought 2.5 million shares between March 11 and March 14 while oil giant OAO Rosneft insiders have been buying shares of that company, according to Bloomberg.