“Second, Eastern Europe produces few raw materials, aside from struggling coal mines in Poland, which turns the global commodity crash to its advantage. Third, a quarter century of democratic trial and error have yielded a broad political consensus in favor of sound macro policies, flexible export-oriented markets, and a steady if gradual curtailing of corruption,” according to Barron’s.

Clearly, there is a significant performance gap between GUR and ESR. The explanation lies in country weights. GUR allocates 46.1% of its weight to Russian stocks, more than double its weight to Polish equities and another combined 24.5% of the ETF’s weight goes to downtrodden Turkish and Greek stocks.

ESR is almost exclusively devoted to Russian and Polish stocks as those countries combine for 91.4% of the fund’s weight. ESR’s weight to Poland is more than 300 basis points higher than GUR’s, explaining some of the former’s performance advantage this year. Additionally, ESR features no exposure to sagging Greek and Turkish equities.

iShares MSCI Emerging Markets Eastern Europe ETF