NEW YORK ( TheStreet) - On Tuesday, investors were greeted to pleasing news regarding the Russian energy industry. Thanks to rising oil prices, state-owned Russian energy giant Lukoil ( LUKOY) reported strong third-quarter earnings numbers, highlighted by a 40% net increase in profits from a year earlier.

While strong numbers from Lukoil bode well for the Russian marketplace, finding the best way to follow the nation's performance has become an increasing difficult task for ETF investors.

Picking a Russian ETF

In November, BlackRock ( BLK) unveiled its newest fund in its growing line of internationally-focused ETFs: the iShares MSCI Capped Russia Index Fund ( ERUS). Designed to track the broad Russian economy, this index is comprised of the largest and most liquid companies traded in the nation.

Although the launch of ERUS marks iShares' first foray into this attractive member of the BRIC emerging nations, it is entering an already heavily saturated ETF market. Aside from ERUS, two other Russia-focused funds have previously been made available to investors: the Market Vectors Russia ETF ( RSX) and the SPDR S&P Russia ETF ( RBL). Like ERUS, these two competitors seek to capture the strength of Russia's markets and, in doing so, boast a number of identical holdings.

Russia's economy is known for being heavily reliant on its domestic oil and gas industry. Therefore, it is not surprising that RSX, RBL, and ERUS each set aside major portions of their portfolio to companies such as Gazprom ( OGZPY), Lukoil, and Rosneft. Currently, 42% of ERUS' index, 31% of RBL, and 22% of RSX are dedicated to the trifecta.

With three funds on the market each seeking to provide investors with exposure to the most prominent companies hailing from the same global economic player, picking the most appropriate can be a tricky task. However, looking beyond the funds' holdings, it is possible to find the option that will provide the most stable play on this nation.

I have consistently urged investors to hone in on a fund's qualities such as trading volume and liquidity before when weighing any ETF option. By opting for funds which boast high average trading volumes, investors will have the room necessary to safely move in and out of positions in the event that the markets are sent for a loop. Typically, I consider funds which trade hands over 100,000 each day to be the most stable products.

Using volume as a thermometer, it becomes clear which Russia-focused ETF is most appropriate for long term investors. RSX, which boasts an average daily trading volume of over 2 million, handedly beats the competition. Comparatively, RBL and ERUS have struggled to gain a following and currently trade hands 8,000 and 5,000 per day respectively.

As the ETF industry continues to expand at a breakneck rate, many fund providers are turning to previously tapped regions of the global marketplace, launching products which are nearly identical to one another.

By boasting an expansive line of products which tap into a diverse collection of market niches, large fund companies are increasingly becoming one-stop-shops for ETFs. However, at the same time, the growing number of copy- cat funds can also lead to confusion when it comes to picking out the most appropriate fund for a specific need.

In the case of Russia, I urge investors looking for the strongest, most stable play to stick to the veteran and abundantly liquid RSX.

Written by Don Dion in Williamstown, Mass.

RELATED STORIES:

At the time of publication, Dion Money Management did not own any equities mentioned.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

If you liked this article you might like

AllianceBernstein Top Managers Hired Away by Goldman Sachs, Fidelity

AllianceBernstein Top Managers Hired Away by Goldman Sachs, Fidelity

3 Top Asset Managers Just Lost About $300 Billion in a Week

3 Top Asset Managers Just Lost About $300 Billion in a Week

The S&P 500 Has Gone Parabolic, So Hurry Up and Buy These 22 Stocks

The S&P 500 Has Gone Parabolic, So Hurry Up and Buy These 22 Stocks

Bitcoin Today: BlackRock's Fink Weighs in From Davos, BoJ Examines Regulation

Bitcoin Today: BlackRock's Fink Weighs in From Davos, BoJ Examines Regulation

Blackrock CEO Larry Fink Just Served Up One Powerful Message: Panera Founder

Blackrock CEO Larry Fink Just Served Up One Powerful Message: Panera Founder