Questionable Timing for First Russian ETF
05/02/07 - 10:24 AM EDT
Lawrence Carrel
Lydon, who is also an asset manager, says potentially aggressive ETFs are not for buy-and-hold investors. "You can't just buy and forget about these," he says. "You have to set stop losses and constantly be willing to pull the trigger if the sentiment goes against you."
Having received approval for extended trading privileges, Van Eck's Russia ETF will trade on the NYSE Arca electronic marketplace between the hours of 4 a.m. to 8 p.m. EST. The DAXglobal Russia+ Index went live only in March, but according to hypothetical back-tested data, the index would have returned a combined total of about 152.52% and 580.90% for the three-year and five-year periods, respectively. Comprising mostly large-cap stocks, the index has 40.6% in the oil and gas sector, 17.6% in telecommunications and 12% in iron and steel. Electric utilities, mining and other sectors make up the rest of the index. The index includes energy companies Lukoil, Gazprom and Surgutneftgaz, and utility giant United Energy Systems. According to the Central Intelligence Agency, Russia posted eight straight years of economic growth, averaging 6.7% since the 1998 financial crisis. Van Eck says Russia has more proven "natural gas reserves than any other country and is among the top 10 countries in proven oil reserves. It's also the largest exporter of natural gas and is the world's second-largest crude oil exporter after Saudi Arabia."
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