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RBL: New Russia ETF from SPDR
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Thursday (3/11/2010) was the first day of trading for SPDR S&P Russia ETF (NYSE: RBL). The fund follows the S&P Russia Capped BMI Index, which seeks to reflect the performance of investable stocks domiciled in Russia.
RBL will compete mainly with Market Vectors Russia (NYSE: RSX), which until now has been the only way for U.S. investors to get pure Russia exposure in an ETF. Launched in 2007, RSX has a big head start but SPDR is a formidable marketing machine. RBL anticipates an expense ratio of 0.59%, only a fraction better than 0.62% for RSX.
As we have pointed out before in regard to Eastern Europe/Russia ETFs, RBL is heavily weighted in energy and materials. Together those two sectors account for about two-thirds of the index. The breakdown looks like this, according to SPDR’s RBL Fact Sheet:
- Energy 49.2%
- Materials 17.9%
- Financials 11.7%
- Telecom 8.7%
- Utilities 8.3%
- Consumer Staples 2.7%
- Consumer Discretionary 0.9%
- Health Care 0.4%
- Industrials 0.3%
If this looks lopsided, it is because the Russian market is itself lopsided. Energy and natural resources dominate the nation’s economy. Other sectors simply orbit around those two. In time Russia may become more diversified, but for now it is mainly a bet on a profitable worldwide energy/materials sector.
Disclosure covering writer, editor, and publisher: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.
