An ETF With All Russia's Benefits -- and Risks

"The sheer volume of Russia's metals reserves, the political clout of Russia's metals tycoons, and the strong global demand for raw materials all suggest that the sector should continue to thrive in the years ahead," he says. "But this will depend, in part, on whether the movement towards consolidation in the sector is successful. This is clearly the direction in which the often-bewilderingly complex Norilsk story is moving, though the denouement of the story will not be clear for several years."

However, Kliment has some words of caution about business conditions in Russia, where successful companies are often penalized -- or sometimes even taken over -- by the government.

"Business interest and activity in Russia continues to grow apace, irrespective of the presidential succession," he says. "President Dmitry Medvedev has repeatedly pledged to improve the business climate, reinvigorate judicial reforms, and battle Russia's pervasive corruption. But these are long-term projects that will require sustained political will to overcome entrenched interests."

Telecom

Russia's telecom sector has also been bustling. The Market Vectors ETF is 12.5% weighted in telecom and includes holdings such as Mobile TeleSystems (MBT Quote) and Vimpel-Communications (VIP Quote). As the two largest mobile phone operators, Mobile and Vimpel have seen their respective stock prices appreciate 400% and 800% over the past five years.

David Weissman, a telecom analyst for Zacks Investment Research, continues to see unique growth opportunities for these two heavy-hitters that sets them apart from their U.S. counterparts.

"Since penetration levels of potential users are near saturation levels in the U.S., companies such as Verizon (VZ Quote), Sprint (S Quote) and AT&T (T Quote) may facilitate subscriber growth levels with consolidation among regional carriers," he says. "This is not necessarily the catalyst needed for growth in Russia and Eastern Europe as it is much more apparent that growth can be fostered by prospecting to a significant untapped user base independent of consolidation efforts."