About half of RSX’s top 10 holdings, a group combining for almost two-thirds of the fund’s weight, hail from the energy sector.

“Fitch-rated Russian oil and gas majors’ performances in 1H17 benefited from a 33% increase in the Urals oil price, which compensated for a stronger rouble,” adds Fitch. “However, we expect FCF generation to vary materially among those issuers in 2017 as a result of differing tax treatments and investment stages. While the tax burden as a percentage of oil price remained relatively stable for most players, Gazprom was subject to higher mineral extraction tax (MET) rates on its gas operations. We view the threat of further tax hikes as limited unless oil prices stay at or below USD40/bbl for an extended period of time, which is not our base case.”

Alternatives to RSX, also the most heavily traded Russia ETF, include the iShares MSCI Russia Capped ETF (NYSEArca: ERUS) and the VanEck Vectors Russia Small-Cap ETF (NYSEArca: RSXJ).

Aggressive, risk-tolerant traders can consider the Direxion Daily Russia Bull 3x Shares (NYSE: RUSL), which attempts to deliver triple the daily returns of the same index tracked by RSX. The Direxion Daily Russia Bear 3x Shares (NYSEArca: RUSS) looks to deliver triple the daily inverse returns of that index on a daily basis.

For more news on Russia ETFs, visit our Russia category.