For investors seeking momentum, iShares MSCI Russia ETF (ERUS - Free Report) is probably on radar now. The fund just hit a 52-week high and is up about 22.1% from its 52-week low price of $30.04/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
ERUS in Focus
The underlying MSCI Russia 25 / 50 Index is free-float adjusted market capitalization weighted Index designed to measure the performance of equity securities in the top 85% by market capitalization of equity securities listed on stock exchanges in Russia.
The fund is heavily dependent on the energy sector (49.33%). It charges 59 basis points in annual fees (see: Broad Emerging Market ETFs here).
Why the Move?
The almost year-long U.S.-Iran tensions have taken another turn this week as Washington has announced it won’t renew waivers previously granted on Iran oil import sanctions. The United States’ sanctions against Iran were first put into place last August.
In the second round, Iran’s energy sector was targeted in early November. But Washington then offered temporary waivers to eight key buyers, China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea, allowing them to continue to import oil from Iran.
Now, the Trump administration plans to toughen the sanctions and stop permitting the above-mentioned countries to import Iranian crude oil. The move has resulted in a sharp spike in oil prices and since Russia is a huge oil exporting nation, the latest move in the energy-heavy fund ERUS is self-explanatory.
More Gains Ahead?
The fund has a positive weighted alpha of 12.50. So, there is definitely some promise for those who want to ride this surging ETF a little further.
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