According to the Van Eck, the new fund is the first US-based ETF designed that provides investors pure-play exposure to the developing local Russian economy as measured by the country’s small-capitalization companies.
Van Eck said that the new ETF seeks to replicate the performance of the Market Vectors Russia Small-Cap Index (MVRSXJTR).
Market Vectors indexes are designed to more fully reflect the fundamental dynamics of investing in local market economies.
As of 13 April 2011, the Market Vectors Russia Small-Cap Index was comprised of 35 companies with an average market capitalization of $2.3bn.
Van Eck Global emerging markets analyst Ed Kuczma said that Van Eck is strong believer in Russia and many other emerging markets and think that large-cap exposure definitely has its place.
"However, we also believe the best way to gain pure-play exposure to a country’s domestic economy is through smaller companies that derive their revenue primarily from doing business locally.
"Other potential advantages with small caps generally include less political interference, relatively better corporate governance practices, and relatively better protection for minority shareholder interests," Kuczma said.
