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Best Russia ETF UK – Compare Top ETFs 2021

In today’s world, Russia is more familiar with its geopolitics rather than a thriving and vibrant economy. However, the country has vast resources at its disposal and a population of around 145 million people, so it’s one of the biggest emerging markets for investors to explore.

In this article, we’ll review the best Russia ETF UK for 2021.

Best Russia ETF UK 2021 List

Here are our picks for the 5 best Russia ETFs in the UK for 2021:

1. VanEck Vectors Russia ETF – Overall Best Russia ETF – Invest Now
2. iShares MSCI Russia ETF –  Best iShares Russia ETF – Invest Now
3. Direxion Daily Russia Bull 2x Shares ETF – Best Leveraged Russia ETF – Invest Now
4. Lyxor MSCI Russia UCITS ETF – Best EU Listed Russia ETF
5. VanEck Vectors Russia Small-Cap ETF – Best Small-Cap Russia ETF

Best Russia ETFs UK Reviewed

We’ve narrowed down the list of the best Russia ETFs in the UK by looking at important factors like how well the fund encompasses the Russian market, the reputation of the company issuing the fund, and the fund’s annual fees. With that in mind, let’s take a closer look at the 5 top Russia ETFs so you can decide which is right for your portfolio.

1. VanEck Vectors Russia ETF – Overall Best Russia ETF UK

This ETF is one of the most popular options for investors in the UK to buy into the Russian market. It currently has around $1.67 billion in assets.RSX price chart

Under the ticker symbol RSX, this fund seeks to replicate the price and performance of the MVIS® Russia Index. This includes not only publicly traded companies incorporated in Russia, but also foreign companies that generate at least 50% of their revenues in Russia. Since the fund holds companies incorporated outside of Russian borders, it offers a broader reach than other ETFs from this list.

There are 29 positions in the portfolio in total, and 60% of the fund’s assets are in the top 10 holdings. So, the fund is top heavy – especially compared to some of the best S&P 500 ETFs. However, this is to be expected since the Russian market is far less developed and transparent than the US market.

Oil and gas names dominate the list, with companies like Gazprom, Lukoil, Novatek, Rosneft and Tatneft at close to 40% of the overall holdings. Mining companies make up an additional 26% of the fund’s assets. Sberbank and TCS Group Holding PLC, both banks, also feature significantly in the portfolio weighting.

The VanEck Vectors Russia ETF carries an expense ratio of 0.67%. It has a one-year return of 55.93% and a 5-year average annual return of 13.24%.

67% of retail investors lose money when trading CFDs with this provider.

2. iShares MSCI Russia ETF – Best iShares Russia ETF

The second-largest Russia ETF, by assets under management, is the iShares MSCI Russia ETF. It has $470 million in assets.

ERUS price chart

Unlike the VanEck RSX fund, this ETF doesn’t include companies listed outside Russian territory. As a result, there are only 27 holdings in the fund.

Close to 70% of assets are invested in the top 10 positions, including Sberbank, Gazprom, Lukoil, Tatneft, Novatek, Norilsk Nickel, and Rosneft. The iShares ETF has a large position in the Russian tech company Yandex but doesn’t currently hold a position in the promising e-commerce company Ozon.

iShares charges a 0.59% expense ratio, which is cheaper than the VanEck ETF, but its performance has lagged as well. It produced a 45.11% return last year and a 5-year annual return of 13.07%.

67% of retail investors lose money when trading CFDs with this provider.

3. Direxion Daily Russia Bull 2x Shares ETF – Best Leveraged Russia ETF

This ETF is definitely not for the faint-hearted, nor for inexperienced investors. The Direxion Daily Russia Bull 2X Shares ETF seeks to double (2X) daily movements in the underlying Market Vectors Russia Index (the same index that the RSX ETF tracks).

RUSL price chart

Like any leveraged ETF, this fund is meant to be used mostly as a short term investment vehicle. Holding RUSL for longer periods will expose you to compounding losses due to daily rebalancing. Until March 31st, 2020, Direxion offered a 3X leveraged version of this fund, but it is no longer available.

This fund has a relatively small pool of assets under management due to its risky nature (it holds close to $57 million in AUM). The expense ratio is a pricey 1.23%.

67% of retail investors lose money when trading CFDs with this provider.

4. Lyxor MSCI Russia UCITS ETF – Best EU Listed Russia ETF

The Lyxor MSCI Russia UCITS ETF is denominated in EUR rather than USD and is listed in Luxembourg, with around 234 million EUR in assets under management.  The fund’s aim is to track both the upward and the downward movement of the MSCI Russia IMI Select GDR Net Total Return index, which combines Russia’s large-cap, mid-cap and small-cap stocks listed on the London Stock Exchange through depository receipts.Lyxor Russia ETF

The result of this design is that the fund is much less volatile than other top Russia ETFs. It has a one-year return of 33.96% and a 3-year annualized return of 8.40%. The fund charges 0.65% in annual management fees, which is relatively modest.

67% of retail investors lose money when trading CFDs with this provider.

5. VanEck Vectors Russia Small-Cap ETF – Best Small-Cap Russia ETF

As the name suggests, this $32 million VanEck ETF seeks to replicate the performance of small-cap stocks in Russia by tracking the MVIS® Russia Small-Cap Index. As for VanEck’s more popular RSX fund, this ETF includes companies incorporated outside of Russian borders that generate at least 50% of their revenues from Russia.

RSXJ price chart

The fund carries an expense ratio of 0.77% and holds positions in 29 companies. It has a broad industry allocation, with utilities, consumer cyclicals and telecommunications sectors each making up between 9% and 15% of portfolio. Industrials and financials lead the way. Notably, energy stocks make up less than 3% of the portfolio.

The fund has a one-year return of 57.61% and a 5-year annualized return of 14.79%.

67% of retail investors lose money when trading CFDs with this provider.

Are Russia ETFs a Good Investment?

Russia is a member of the so-called ‘BRIC’ group of emerging market countries – which includes Brazil, Russia, India, and China. The country is a global commodity powerhouse and accounts for a  significant portion of the world’s supply of oil, gas, and metals.

Despite Russia’s size and large population, the country has always struggled economically. That represents an opportunity for investors, though, as Russian companies have the potential to take off as the global economy realigns in the wake of the COVID-19 pandemic. Russia is in the midst of rolling out its own vaccine and there are expectations for strong post-pandemic growth in 2021 and beyond.

Investors will want to take note that Russia’s economy and stock market are heavily dependent on the energy and mining industries. Some of the biggest companies in the country are state-run enterprises like Gazprom and Lukoil. When oil prices drop, as they did in the first half of 2020, Russia’s economy quickly drops as well. So, investors need to be aware that the Russian economy is subject to boom and bust cycles.

Another thing to consider is the impact that frequent geopolitical clashes with the West have on the normal and stable functioning of the market. Sanctions by the US and Europe, in particular, have held Russia’s economy back in recent years, and tensions could continue to build as Russia acts aggressively towards Ukraine.

On the bright side, investing in Russia doesn’t have to be only about the energy sector. The VanEck Vectors Russia Small-Cap ETF focuses on utilities, telecom, and financial companies, while broader Russia index funds now include tech companies like Yandex. As Russia’s nascent tech industry grows, there may be more opportunities for diversification.

Best Russia ETF UK Investment Platforms 2021

Now that you have learned more about the best Russia ETFs, the next step is finding a UK share dealing account that allows you to invest in them. There are many things to consider when choosing the right platform, such as fees, regulatory protections, customer support, and available payment methods.

To make it easy to get started, we’ll review our top 2 picks for the best stock brokers UK that you can use today.

1. eToro – Buy the Best Russia ETF UK with No Commission

eToro commodity broker

eToro is one of the best UK platforms for buying stocks as well as the best ETFs. The broker has a selection of almost 450 ETFs available and is adding more every month. 

eToro does not charge any commission when trading ETFs and you won’t pay an annual fee for your account. The broker does charge a small spread for trades, as well as an inactivity fee if you go for more than a year without placing any trades.

Part of what makes eToro unique is its social trading network. You can connect with more than 12 million users worldwide to share ideas and track the market. Having a quality peer group is a valuable tool for all investors, beginners and advanced ones alike. In addition, eToro enables you to copy professional investors so you can build a portfolio in seconds and automate your trading account.

eToro copy

The broker allows you to buy fractional shares of ETFs, so you only need to make a minimum investment of $50 (about £36) per trade. That makes it easier to get started investing in Russia ETFs with only a small amount of capital. You can fund your account with a credit card, debit card, PayPal, Neteller, or Skrill.

eToro is regulated by the UK Financial Conduct Authority (FCA) and offers 24/5 customer support.

Pros:

  • Super user-friendly online stock broker
  • Buy ETFs without paying any commission
  • 450 ETFs and growing in its database
  • Social and copy trading features
  • Accepts PayPal
  • Licensed by the FCA

Cons:

  • Not suitable for advanced traders that like to perform technical analysis

67% of retail investor accounts lose money when trading CFDs with this provider.

2. Capital.com – Commodity CFD Broker With Competitive Spreads

Capital.com commodity broker

Capital.com is a CFD broker that offers trading on all major asset classes. This includes stocks, ETFs, indices, forex, cryptocurrencies, and commodities. Notably, the platform offers CFDs individual Russian stocks such as Gazprom, Sberbank, and Ozon.

Capital.com Trading Platform

Capital.com does not charge trade commissions and is known for its competitive spreads. There are also no fees for deposits and withdrawals and no inactivity fee.

Capital.com has a proprietary browser-based web platform and apps for mobile devices that offers watch-lists, technical analysis, and more. You can also connect your trading account to the popular Metatrader4 platform for more advanced trading tools.

One thing we love about Capital.com is its expansive library of tutorials for newer investors who are just getting started with the whole trading business. There are dozens of videos explaining the basics of CFD trading. In addition, Capital.com offers a mobile app called ‘Investmate’ that helps you learn about trading on the go.

Capital.com is regulated by the FCA in the UK and CySEC in Cyprus. The broker offers 24/7 customer support.

Pros

  • Minimum deposit is just $20.
  • Offers individual companies exposure via ADR
  • Known for competitive spreads.
  • Over 2,700 different instruments to trade.
  • Competitive overnight fees.
  • Regulated by the FCA.

Cons

  • Can’t buy underlying shares of commodity companies.

71.2% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider.

How to Invest in Best Russia ETF UK on eToro

Investing in ETFs is easier than ever thanks to the rise of innovative trading platforms like eToro. Let’s take a closer look at how you can start trading Russia ETFs today.

Step 1: Open an Online Trading Account

To open an account, navigate to eToro’s website and click on the ‘Join Now’ button, you can also sign up with their investment app. Choose a username and a password and enter your email address.

Signup on eToro

67% of retail investor accounts lose money when trading CFDs with this provider.

Step 2: Verify Your Account

You will need to verify your email address, mobile number, and identity to complete the account registration process. First, answer some questions about your investing experience. You will also receive an email to verify your email address and an SMS message to verify your phone number. To verify your identity, you will need to upload a copy of your passport or driver’s license and proof of your address.

Step 3: Deposit Funds

eToro gives you several options to fund your account.  Click on the ‘Deposit Funds’ button at the bottom of the menu on the left, and enter the amount you want to deposit and the currency.

Then select from the following options:

  • Credit Card
  • Debit Card
  • Bank Transfer
  • E-Wallets: PayPal, Skrill, Neteller

eToro requires a minimum deposit of $50 when you open a new account.

Step 4: Search for the Best Russia ETF UK to Invest in

Search for the Russia ETF you want to buy or select the ETFs market to browse all of the ETFs available on eToro. Once you find the ETF you want to buy, click ‘Trade’ to open a new order form.

eToro ETFs

67% of retail investor accounts lose money when trading CFDs with this provider.

Step 5: Enter your order

There are two ways to enter an order to buy or sell a Russia ETF with eToro. You can either trade at the current market price, or you can enter an order with a limit price if you only want to enter the trade at a specific price point.

When you enter your order, you can set a stop loss level and a take profit level, which will help you manage risk and ensure that you exit when the price reaches your target level.

Once your trade is ready, click on the ‘Open Trade’ button to complete your investment.

eToro – Invest in the Best Russia ETF UK with 0% Commission

Russian ETFs present a good alternative for investors seeking a more globally diversified portfolio. Like the country itself, many of the best Russia ETFs are energy and materials heavy. So, movements in commodity markets have a substantial impact on the performance of these funds – for better or worse.

Ready to buy the best Russia ETFs in the UK? Get started with eToro today and pay no commissions when you invest!

67% of retail investor accounts lose money when trading CFDs with this provider.

FAQs

Which is the best among these 5 Russian ETFs

Which Russian ETF is the most diverse?

Which Russian ETF is least impacted by volatility in energy and commodity markets?

Which Russian ETF is the most risky?

Should I hold ETF for long-term or short-term horizon?

About Ilija Rajakovic PRO INVESTOR

Ilija Rajakovic is a Serbian-based investor and writer. His main focus areas include finance, trading, and macroeconomy. Ilija holds a Master’s Degree in Investment Banking and is pursuing his Ph.D. with a focus on sustainable finance and development. He is actively managing personal investment portfolios and advising private clients. And has run a website which generated actionable stock market ideas and provided insights into global economic landscape in the past. His economic articles have been publshed in highly respected magazines like NIN and Magazin Biznis.

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