NEW YORK ( TheStreet) -- When it comes to playing Russia, two's a crowd.

Last week, State Street ( STT) unveiled its newest exchange traded fund: the SPDR S&P Russia ETF ( RBL).

This ETF threatens to step squarely on the toes of another fund: the Market Vectors Russia ETF ( RSX). RSX has followed many of the same companies and boasts an impressive track record since its 2007 launch.

Given RSX's significantly longer track record and impressive run up over the past year, State Street's new offering has a massive hill to climb.

RBL's debut highlights a growing trend within the ETF realm. Boasting over 900 products, the ETF arena is becoming noticeably crowded with copycat instruments.

Some of the most recognizable rivalries that have propped up in the ETF arena include the iShares MSCI Emerging Markets Index Fund ( EEM) vs. the Vanguard Emerging Market ETF ( VWO); and the iShares S&P 500 Index Fund ( IVV) vs. the SPDRS S&P 500 ETF ( SPY).

While a number of the most popular "me-too" products focus on broad market indexes, as evidenced in RBL, companies have also stepped up the competition when it comes to individual sectors and popular nations as well.

Although both track their own specific indexes, the largest slices of RSX's and RBL's portfolios are dominated by many of the same firms. RSX follows the DAXglobal Russia+ Index, while RBL is backed by the S&P BMI Capped Index. Both funds have heavy exposure to energy giants like Gazprom ( OGZPY), Lukoil ( LUKOY), Rosneft ( OJSCF) and Surgutneftegaz ( SGTZY), which together account for nearly a third of their respective portfolios.

Given this heavy exposure to large producers of oil and natural gas, investors should consider their current exposure to energy. For those with sufficient energy exposure, a small, niche position as part of a well-diversified portfolio is ideal.

Over the past year, Russia's energy dominance coupled with the global economic recovery have helped RSX to power higher and become one of the top performing ETFs. In the most recent one-year period through March 18, the fund is up more than 140%.

Seeing RSX's impressive run up over the past year, RBL has considerable hurdles to overcome if it hopes to steal market share. The fund, however, does have some qualities working to its advantage.

First, RBL's index is considerably more diversified. Although, for the most part, top energy positions will dominate the fund's performance, RBL's 72 holdings construct a more encompassing representation of Russia's market than RSX, which tracks 37 companies.

Further aiding RBL in its effort to develop a following is the fact that it is less expensive than its competitor, albeit by a very slim margin. Charging 0.59%, the fund is 3 basis points cheaper than RSX.

For now, RBL, in its infancy, will likely remain a lightly traded option. Therefore, investors would be best off watching it from the sidelines. RSX has already proven to be an effective, successful means of playing this emerging market titan and remains the overwhelming weapon of choice.

-- Written by Don Dion in Williamstown, Mass.

At the time of publication, Dion was long Market Vectors Russia ETF.

Don Dion is president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.

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