Relatively debt-free Russia may look attractive to investors looking to steer clear of a eurozone sinking in debt, but Russian dependence on the performance of oil keeps it from becoming a true safe haven, according to an article on Zacks.
Indeed, with oil prices tumbling, positives in Russia such as strong exports and little banking exposure to the eurozone are outweighed, the article said. Russia is the world’s biggest crude oil exporter and is tied with Saudi Arabia in terms of oil production, said Eric Dutram, contributor to the Zacks article.
The Market Vectors Russia ETF Trust (NYSEArca: RSX) and the Market Vectors Russia Small Cap ETF (NYSEArca: RSXJ) lost over 11 percent and 16 percent, respectively, over the past six months—echoing to some extent crude’s slide and falling behind broad European markets, the article said.
To read Dutram’s full perspective, visit Zacks.com.