ITI Funds cross-lists two Russia ETFs on MOEX

Apr 15th, 2018 | By | Category: ETF and Index News

ITI Funds, the ETF issuing arm of emerging markets specialist Da Vinci Capital Management, has cross-listed two of its Russia focused ETFs on Moscow Stock Exchange (MOEX). The two ETFs – an equity fund and a bond fund – were first listed on London Stock Exchange on 22 February of this year.

ITI Funds, has cross-listed two of its Russia focused ETFs on Moscow Stock Exchange (MOEX)

ITI Funds has cross-listed two of its Russia-focused ETFs on Moscow Stock Exchange (MOEX).

The ITI Funds RTS Equity UCITS ETF uses physical replication to track the RTS Index – Russia’s oldest and most widely used equity index for equity securities traded on MOEX. The index is currently composed of 45 equity securities of Russia’s top companies by market cap and liquidity.

The index’s sector exposure is heavily weighted towards energy stocks, accounting for approximately half of the total index weight. Financials and materials also have significant positions, with over 10% in each. The majority of the index leans towards larger-cap companies, with mid-caps comprising around 10% of the total exposure.

The fund has a total expense ratio (TER) of 0.65%.

The ITI Funds Russia-focused USD Eurobond UCITS ETF tracks the ITI Funds Russia-focused USD Eurobond Index, calculated by Solactive. The index constitutes 22 Russian sovereign or corporate dollar-denominated Eurobonds.

Eurobonds included in the underlying index must be bullet bonds only and have an amount outstanding of at least $750m. The index limits a maximum of two issues per corporate issuer and can only track bonds which are equivalent or higher than Russia’s sovereign rating.

The fund has a TER of 0.50%.

The ETFs offer investors exposure to the Russian debt and equity markets, which have both been heavily discounted in the wake of ongoing political uncertainty. The RTS Index shed around 10% shortly after the US imposed further trade sanctions for Russian companies and individuals.

Elio Manca, ITI Funds managing director, commented, “Whilst we are conscious of the uncertainty surrounding Russia politically, the underlying economic fundamentals for Russian corporates, from an investment standpoint, remain compelling over the longer term. The funds provide efficient entry, with diverse exposure to direct securities, into the Russian equity and bond markets.”

So far, there has been $10 million of seed money invested into the two new ETFs, which has come mainly from the firm’s own clients.

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