Russia’s benchmark Micex Index “is now trading at the biggest discount to emerging-market equities since at least 2005,” according to Bloomberg.
The Micex currently trades at 4.7 times earnings as stocks ranging from OAO Gazprom to Lukoil and Mobile Telesystems, a combined 20% of RSX’s weight, trade at massive discounts to their average 10-year price-to-earnings ratios.
Although it has to yet to add (or lose) assets this quarter, the Market Vectors Russia Small-Cap ETF (NYSEArca: RSXJ) added $26.7 million of its nearly $69 million in assets under management during the third quarter.
Russian small-caps are also extremely inexpensive as highlighted by RSXJ’s end-of-third-quarter P/E ratio of 5.9 and price-to-book ratio of 0.9, according to Market Vectors data.
Market Vectors Russia ETF
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of EEM.