"In spite of what you might expect to be a “perfect storm” scenario for Russian stocks, inflows of investment capital into Exchange Traded Funds (ETFs) – investment funds traded on stock markets much as a stock would trade – have remained strong.
Net inflows into the 23 Russian tracking ETFs have proved buoyant in the last three months in spite of continued sanctions by the US and Europe and Moscow’s destabilising actions in Ukraine. Such inflows take 2014 net inflows into Russian ETFs past the $1bn mark (see chart), an extraordinary performance given the negative newsflow surrounding Russia.
The inflows have also come in spite of the rouble’s 25 per cent decline against the US dollar this year. Perhaps investors are drawn by the promise of bargains, and perhaps by expectations of central bank interventions to support the flagging rouble.
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