Exposure to Russia and E. Europe Lacks an Ideal Vehicle

Roger Nusbaum submits: For now there is no ETF for Russia. There are a couple of CEFs including the Central Europe & Russia Fund (CEE) and the Templeton Russia & Eastern Europe Fund (TRF).

TRF seems to always trade at a huge premium to NAV (net asset value), and CEE usually maintains a small discount. CEE outperformed for two years and three months, while TRF outperformed for one year and six months. The difficulty in buying TRF is the premium; if you buy it when the premium is 35%, vs. 18% now, you tend to run in to trouble. I don't think there is a realistic way to predict what the premium will do in the future. I own CEE for one client, consistent with a particular mandate, but it is not an ideal product.

It may be the best way for now (of course I may be wrong about that), but it is flawed. I have to think that an ETF, if it ever comes could be a better vehicle.

TRF vs CEE 3-yr Chart

• ETF Update: New Asia ETF, Commodity ETFs, Base Metal Prices  »
• Wednesday Outlook: Bear Attack?  »
• Wednesday Outlook: Commodities, Emerging Markets  »
• Mexico ETF: Strong Peso and Latin American Presence  »
• ETFs on the Outperformance of Two Securities   »