How to invest in Russia using ETFs

How do I invest in Russian stocks?

The easiest way to invest in the whole Russian stock market is to invest in a broad market index. This can be done at low cost by using ETFs.

On the Russian stock market you find 5 indices, which are tracked by ETFs.

Alternatively, you can consider indices on the BRIC countries and Eastern Europe. In the indices on Eastern Europe Russia is weighted strongly with a weight of over 50%. Whereas in the BRIC indices Russia is weighted with less than 25%.

0.60% p.a. - 1.20% p.a.
annual total expense ratio (TER) of Russia ETFs
on the Russian stock market, which is tracked by ETFs
on the Russian stock market
The best indices for Russia ETFs

Performance of Russian stocks (MSCI Russia)

1 month: 3.67%
1 year: 50.77%
3 years: 0.44%
5 years: -5.34%

Indices in comparison

The best indices for ETFs on Russia

For an investment in the Russian stock market, 5 indices tracked by 5 ETFs are available. Among the available indices there are number of capped indices. These indices limit the maximum weight of one constituent in the index in order to improve the diversification. The total expense ratio (TER) of ETFs on these indices is between 0.60% p.a. and 1.20% p.a..

Index Investment focus Number of ETFs Number of constituents Short description

Dow Jones Russia GDR

Russia 1 ETF 14
(31/10/16)
The Dow Jones Russia GDR (price) index tracks the largest and most liquid Russian stocks.
Index factsheet

MSCI Russia

Russia 1 ETF 21
(31/10/16)
The MSCI Russia index tracks the Russian equity market.
Index factsheet

MSCI Russia 25% Capped

Russia 1 ETF 21
(31/10/16)
The MSCI Russia 25% Capped index tracks the Russian equity market. Constituents whose weights are greater than 25% are capped daily to 22.5% and quarterly to 20%.
Index factsheet

MSCI Russia Capped

Russia 1 ETF 21
(31/10/16)
The MSCI Russia Capped index tracks the Russian equity market. The largest constituent is capped at 30% while the weight of any other constituent is capped at 20% (reviewed quarterly or if 35% is reached).
Index factsheet

Russian Depository

Russia 1 ETF
The Russian Depositary (price) Index (RDX) tracks the most liquid depositary receipts on Russian shares traded on the London Stock Exchange.
ETF
ISIN
  Fund size
in m GBP
TER
in %
Use of profits Fund domicile Replication method
iShares MSCI Russia ADR/GDR UCITS ETFIE00B5V87390 182 0.65% p.a. Accumulating Ireland Full replication
db x-trackers MSCI Russia Capped Index UCITS ETF 1CLU0322252502 102 0.65% p.a. Accumulating Luxembourg Unfunded swap
Lyxor UCITS ETF Russia (Dow Jones Russia GDR) D-GBPFR0011495944 48 0.65% p.a. Distributing France Unfunded swap
HSBC MSCI Russia Capped UCITS ETF USDIE00B5LJZQ16 40 0.60% p.a. Distributing Ireland Full replication
Source RDX UCITS ETF AIE00B5NDLN01 14 1.20% p.a. Distributing Ireland Unfunded swap
 
Index   1 month
in %
3 months
in %
6 months
in %
1 year
in %
3 years
in %
Dow Jones Russia GDR 2.56% 14.33% 36.39% 44.61% -4.45%
Russian Depository 2.12% 13.67% 36.05% 46.09% -1.11%
MSCI Russia Capped 2.65% 14.84% 35.72% 46.38% -2.29%
MSCI Russia 3.43% 14.79% 35.70% 48.41% 0.19%
MSCI Russia 25% Capped 3.34% 15.34% 35.33% 48.66% 0.00%
Index   2016
in %
2015
in %
2014
in %
2013
in %
2012
in %
MSCI Russia Capped 28.67% 33.88% -42.94% -2.61% 8.19%
Dow Jones Russia GDR 61.08% 2.27% -40.79% - -
MSCI Russia 25% Capped 63.86% 1.27% -39.90% -2.50% 9.31%
Russian Depository 64.42% 0.38% -39.04% -1.67% 11.26%
MSCI Russia 65.68% 0.85% -40.78% -1.28% 7.40%

Source: justETF.com; As of 30/11/16; Calculations in GBP based on the largest ETF of the respective index.

 

Eastern Europe indices with a share of Russia

Besides Russia ETFs you may consider indices on Eastern Europe. In total, you can invest in 2 Eastern Europe indices, which are tracked by 2 ETFs. With over 50%, Russia is weighted strongly in Eastern Europe indices. The total expense ratio (TER) of ETFs on Eastern Europe is between 0.55% p.a. and 0.74% p.a..

 
Index Investment focus Number of ETFs Number of constituents Short description
MSCI Emerging Markets Eastern Europe 10/40 Eastern Europe
Russia: 55.03%
(31/10/2016)
1 ETF 50
(31/10/16)
The MSCI Emerging Markets Eastern Europe 10/40 index tracks stocks from emerging Eastern European countries. The imbedded 10/40 rule limits the weight of a single company to 10% of the index. The sum of all companies with weights between 5% and 10% is limited to 40%.
Index factsheet
MSCI Emerging Markets Europe Europe
Russia: 54.79%
(31/10/2016)
1 ETF 83
(31/10/16)
The MSCI Emerging Markets Europe index tracks the equity markets of emerging markets in Europe.
Index factsheet
ETF
ISIN
  Fund size
in m GBP
TER
in %
Use of profits Fund domicile Replication method
iShares MSCI Eastern Europe Capped UCITS ETFIE00B0M63953 168 0.74% p.a. Distributing Ireland Optimized sampling
SPDR MSCI EM Europe UCITS ETFIE00B431K857 7 0.55% p.a. Accumulating Ireland Optimized sampling
 
Index   1 month
in %
3 months
in %
6 months
in %
1 year
in %
3 years
in %
MSCI Emerging Markets Europe -2.46% 7.28% 20.42% 29.36% -11.88%
MSCI Emerging Markets Eastern Europe 10/40 -1.14% 9.46% 26.87% 36.42% -3.79%
Index   2016
in %
2015
in %
2014
in %
2013
in %
2012
in %
MSCI Emerging Markets Europe 37.07% -12.33% -24.11% -6.94% 17.93%
MSCI Emerging Markets Eastern Europe 10/40 44.63% -0.24% -31.28% -1.50% 15.27%

Source: justETF.com; As of 30/11/16; Calculations in GBP based on the largest ETF of the respective index.

 

Regional indices on Brazil, Russia, India and China (BRIC)

As second alternative to Eastern Europe you may consider indices on BRIC. In total, you can invest in 1 BRIC index, which is tracked by 1 ETF. However, in the BRIC indices Russia is only represented with less than 25%. The total expense ratio (TER) of ETFs on BRIC countries is around 0.74% p.a..

 
Index Investment focus Number of ETFs Number of constituents Short description
FTSE BRIC 50 Emerging Markets
Russia: 13.23%
(31/10/2016)
1 ETF 50
The FTSE BRIC 50 index tracks the 50 largest stocks of the BRIC countries (Brazil, Russia, India, China).
Index factsheet
ETF
ISIN
  Fund size
in m GBP
TER
in %
Use of profits Fund domicile Replication method
iShares BRIC 50 UCITS ETFIE00B1W57M07 215 0.74% p.a. Distributing Ireland Full replication
 
Index   1 month
in %
3 months
in %
6 months
in %
1 year
in %
3 years
in %
FTSE BRIC 50 -3.68% 4.85% 34.27% 36.92% 25.44%
Index   2016
in %
2015
in %
2014
in %
2013
in %
2012
in %
FTSE BRIC 50 39.27% -7.47% 1.87% -5.56% 6.99%

Source: justETF.com; As of 30/11/16; Calculations in GBP based on the largest ETF of the respective index.