Analysts expect Russia’s benchmark Micex Index to surge 27% over the next 12 months, the best expected performance among the four BRIC nations, Bloomberg reported earlier this weeek.
Expectations of a lengthy rally in Russian shares has some traders ratcheting up their risk tolerance with Russia ETFs. For example, the Direxion Daily Russia Bull 3x Shares (NYSEArca: RUSL), which attempts to deliver three times the daily performance of RSX’s underlying index, has added over $26 million in new assets this month. [Getting Aggressive With Russia ETFs]
Compelling valuations are helping. RSX sported a trailing 12-month P/E ratio of just 5.87 and a price-to-book ratio of 0.81 at the end of July, according to Market Vectors data. That is a significant discount to the comparable India and Brazil ETFs.
Notable discounts are available on Russian small-caps as well and that has helped stoke inflows to the Market Vectors Russia Small-Cap ETF (NYSEArca: RSXJ). At the end of July, RSXJ’s P/E was just 6.93. The ETF has added $16.6 million of its $73.2 million in assets under management this month. RSXJ is up 11.2% since we profile it on May 2. [Big Potential With Small Russia ETF]
Market Vectors Russia ETF
