ETF XRAY

Russian ETF Primarily Energy Play

Tne new Russian exchange-traded fund (RSX) introduced by the Van Eck family of ETFs is decidedly an energy play. RSX tracks the DAXglobal Russia Index, which holds 30 companies based in Russia and attempts to represent the Russian economy broadly. RSX is very exposed to energy companies, accounting for over $150 billion of exports in 2006. Backtested the DAZglobal Index has yielded a 5-year annualized performance of about 40% .

This dependence on energy cuts both ways of course but keep in mind that politically Russia may present global ETF investors with more risk than other BRIC countries. Russia will also be watched closely as it elects new leadership in early 2008.

Jonathan Bernstein of ETFzone points out that only one company in the top eight holdings of RSX is not an energy company. This is Sberbank which is heavily involved in energy lending. A quick glance shows that almost 50% of the RSX basket is accounted for by the largest seven energy holdings. Still, RSX is far superior in terms of cost and flexibility to previous Russian funds on the market and has an annual fee of only 0.69%.

By Carl Delfeld of the Chartwell ETF Advisor

Russian ETF Takes Off

Van Eck Global launched the first Russia exchange-traded fund (RSX). RSX is based on a basket of 30 Russian equities which track the DAXglobal Russia + Index (DXRPUS). The Index includes 5 U.S. listed ADRs, 19 London GDRs and 6 local Russian ordinaries. RSX has a management fee of 69 bps.

Russia is primarily an energy play but the country is swimming in liquidity and its market shows good momentum. Politically, it is going backwards.

Van Eck has another interesting ETF in the pipeline. The Global Alternative Energy ETF (GEX), which is anticipated to launch on May 9th, has management fees of 65 bps. GEX is based on the Ardour Global Index extra-liquid (AGIXL) which contains 30 Alternative Energy stocks from around the world.

By Carl Delfeld of the Chartwell ETF Advisor

Van Eck to Launch Russia ETF

Last month, 45 new exchange-traded funds were launched, bringing the total to 435. Van Eck annouced in a press release two more ETFs that are to begin trading sometime during the second quarter: the first Russia ETF listed in the U.S. and a global alternative energy ETF. Both will be listed on the NYSE and their ETF basket will contain 30 stocks.

I view Russia as primarily an energy play and in many respects the country is moving in the wrong direction.
Still if you can stomach the volatility and uncertainty, the Russian market can be explosive on the upside and is swimming in liquidity.

By Carl Delfeld of the Chartwell ETF Advisor