ETF Investing: Russia ETFs on track for worst day since 2014 after sanctions, geopolitical tensions

Mutual Funds

Exchange-traded funds that track the Russian equity market tumbled on Monday and were on track for their biggest one-day drop in years.

The slump followed a new round of sanctions that were imposed on Russian entities and individuals, while tensions between Russia and the U.S. also escalated after a suspected chemical-weapons attack in Syria. President Donald Trump tweeted that Russia and its president, Vladimir Putin, were responsible for backing Syrian President Bashar al-Assad, and said there would be a “big price…to pay.”

The VanEck Vectors Russia ETF

RSX, -10.04%

 tumbled 9.4%, on track for its worst session since December 2014. The fund traded on volume of nearly 20 million shares, well above its 30-day average of 8 million. Another fund, the iShares MSCI Russia ETF

ERUS, -11.17%

sank 10.6% and was also on pace for its biggest decline since December 2014.

The U.S. dollar jumped 3.6% against the Russian ruble

USDRUB, +4.0037%

which dropped to its lowest level since August.

Related: 4 reasons ruble bulls are optimistic about Russia’s currency

The decline was enough to turn both ETFs lower for the year; the VanEck fund is down 4.3% in 2018 while the iShares fund is off 4.6%. The S&P 500

SPX, +1.72%

is down 1% year to date while the Dow Jones Industrial Average

DJIA, +1.62%

 is off 1.7%.

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