Just like in real estate, investors make money in the market when they buy, not when they sell. And if there’s one global name that with a few hundred euros you can buy at a low price today, it’s Russia.
Even Turkey lately has a more potent dynamic than Russia, and this country is moving away from Washington and Brussels. Secretary of State-designate Mike Pompeo has called Turkey an Islamic dictatorship. At least Russia continues to call us “partners. “
“Given all the politics, why problems with Russia?The answer is a mix of profitability in Russian private-sector companies, the story of long-term improvement of the Russian client is still valid, and I don’t know at least how “this policy crisis will last a long time,” says Michael Reynal, a longtime emerging markets fund manager at Sophus Capital in Des Moines.
Most retail investors access the purely Russian budget through the VanEck RSX and RSXJ products. RSXJ is as sanction-free as imaginable and therefore has the most productive chance of resisting sanctions. These come with mid- and small-cap corporations like real estate giant LSR. The agribusiness company RosAgro, the DIXY Group store, and the online payments company Qiwi, which are marketed here in the United States. The name has been outperformed throughout the year and underperforms.
RSXJ was oversold on Monday, the first day of trading after Trump ordered missile strikes on three Syrian facilities suspected of generating chemical weapons. The Syrian government denies that anyone has chemical weapons. This is the moment when Washington discovers that the Syrian government is to blame for chemical attacks. The last time this happened, in 2017, Trump promptly fired on an airstrip believed to be the launch site of planes carrying a chemical bomb. A year later, General Mattis said there was no evidence that Washington’s resources in Syria, mostly humanitarian teams and so-called moderate rebels partially funded through the United States were right about the origin of the attack.
The market thinks that this may be the case again and is therefore content for the president to avoid damaging the equipment of the Syrian and Russian army.
On the investor side, most investors prefer to own the VanEck Russia Exchange Traded Fund (RSX) than the VanEck Russia Small Cap ETF (RSXJ). The last five days have shown inflows that have helped propel the RSX above the RSXJ.
“Who owns Russia’s small cap?”says Mark Chaikin, founder of Chaikin Analytics in Chicago.
Anyone who thinks Russia is waging a proxy war in Syria and thinks RSXJ has the alpha to beat RSX. Since 2016, VanEck’s “sanction-proof” ETF is up 54. 6% compared to its sanctions-laden ETF, a 20. 7% increase.
Little Russia has more than Big Russia. The large-cap fund has outperformed recently because oil has given it a boost.
“We would only move into the RSXJ with a gain of more than 25% if we felt that a real geopolitical inflection point was approaching,” says Vladimir Signorelli, founder of macro investment research firm Bretton Woods Research LLC. “Until Trump and Putin have “A face-to-face summit will see a geopolitical uptick in Russian stocks,” he said.
The same old suspects in Washington, the same ones who have been calling for a regime replacement in the Middle East for nearly two decades, will make sure that Trump and Putin never have a tête-à-tête. This helps keep the fuse lit for the new Cold War.
There’s news here.
First, Russia retaliated just as it had threatened. No ships sank. There are no shoes on the podiums of United Nations offices to deplore the vassal and colonial states of the Western powers. There are no Khrushchev moments.
Two issues stand out here: Putin rejected his parliament’s bill to impose sanctions on the United States, and Trump reversed Nikki Haley’s pledge last Friday at the United Nations that new sanctions would be applied to Russia. (For some, this is “proof” that Putin and Trump are in cahoots. Politics junkies are still waiting for the whore video Putin pretends to have of Trump somewhere. )
According to a New York Times report, Trump rejected any new Russia-related sanctions on Bashar al-Assad, in line with his crusader pledge to work with Russia to defeat Muslim terrorism.
Larry Kudlow, Trump’s new economic adviser, said Haley didn’t get his message, setting off a mini-war of words that made headlines earlier this week. Kudlow apologized to Haley but said he was unaware of the White House’s day-to-day foreign policy discussions. “The policy was replaced and she didn’t report it,” Kudlow was quoted as saying.
Clinton loyalists in the Democratic Party and status quo Republicans like Lindsey Graham have a strong anti-Russian and anti-Putin bias, albeit for different reasons. This can seamlessly foster a stinging mindset and test Trump’s loyalties within the foreign policy status quo. That includes the upper echelons of the intelligence agencies still waging George W. ‘s war on terror. Bush.
An impeachment trial against Trump would temporarily replace that position and send RSX and RSXJ into the red. This is especially true if Trump is impeached through the Senate. Lately, the market sees this as the worst-case scenario, the baseline scenario.
Vice President Mike Pence and Haley are in favor of regime replacement in Syria and have an anti-Putin bias. The difference of opinion on Russia between Trump and Pence has become evident in the 2016 presidential and vice presidential debates.
Haley’s headline-grabbing tough stance on Russia now threatens to hurt Trump and other members of Mattis’s cabinet. According to the Times, Haley’s “central role in deliberations over an opposing military attack on Syria in recent days has exacerbated the frustrations of some. “
Trump is not in favor of warmongering toward Russia anytime soon. If Pence doesn’t appear on the 2020 presidential list, this entrenched divergence with Trump over U. S. -Russia policy may be just one of the main reasons. That would be bullish for Russian stocks.
Meanwhile, Russia is developing again economically, albeit at a slower pace than the rest of the BRICs. It is possible to increase the income tax from private sources in Russia from 13% to 15%. raising the retirement age, cutting VAT exemptions and raising oil taxes in the next government, which takes office next month. There may also be headwinds.
For some investors, the RSXJ has growth prospects of between 10% and 12%. But for investors who need to avoid Russian collusion and Washington madness, it would arguably be better for those who are risk-averse to look to frontier markets or small emerging markets. .