ETFs for Exposure to Emerging Russia

If you're thinking about adding RSX to your portfolio, it's worth noting that while it does include a few ADRs , the majority of the securities it tracks are traded offshore. When you're looking to gain exposure to new markets with vehicles like an ETF, it's always a good sign that it's not composed primarily of ADRs that you can buy here at home.

Other Ways to Capture Russia's Returns

If the Russia-focused ETF isn't your speed, an alternative for coverage of the Russian market can be found by reviewing broader closed-end mutual funds , such as the Central Europe and Russia Fund CEE, which has brought back annualized returns of more than 40% since 2005, as well as Morgan Stanley's Eastern Europe CEF RNE, which has brought in about half as much as CEE over the same period.

There are also a couple of Russian ADRs floating around on American exchanges. While the majority of these ADRs trade over the counter , the heavy hitters of the group, such as the NYSE -traded telecommunications company Rostelecom ROS, have given investors returns well into the double digits.

Russia's Market Revolution

Frankly, investors have been scared away from Russia in the past and are only now coming back. With the collapse of Russia's economy in 1998, Western investors interested in post-Soviet Russia were sent running for the hills. This is likely one of the reasons that Russia's companies have been undervalued .