Russia remains the nemesis of the U.S., but that hasn't stopped American investors from wanting to profit from the emerging Russian economy. With its vast and plentiful natural resources in the energy and mining industries, Russia appeals particularly to investors who like hard assets. Investors often find it hard to invest directly in foreign stocks, and with relatively few Russian companies having listed their shares on U.S. exchanges, exchange-traded funds are among the best ways to get exposure to the world's most expansive nation. The following three Russia ETFs take different approaches to investing but do a good job of helping their shareholders gain access to stocks there.

Russia ETF

Assets Under Management

Expense Ratio

5-Year Avg. Annual Return

VanEck Vectors Russia (RSX)

$1.95 billion

0.65%

(3.3%)

iShares MSCI Russia Capped (ERUS)

$475 million

0.64%

(3.9%)

VanEck Vectors Russia Small-Cap (RSXJ)

$54 million

0.75%

0.6%

Data source: Fund providers.

Two ETF rivals go head to head in Russia

There are two main ETFs focusing on Russia, with a handful of funds with much smaller amounts of assets under management. The VanEck Vectors Russia ETF was the first ETF to offer extensive Russian exposure, opening its doors in 2007. The fund tracks an index of stocks that are either incorporated within Russia or get at least half their revenue or assets within Russia. Despite admitting that Russia is a commodity-rich country, the VanEck ETF tries to deemphasize the energy industry compared to other Russia indexes. A third of the fund's assets are invested in energy stocks, and basic materials bring the total exposure to natural resources above 50%. Yet considerable allocations to financial services, technology, telecommunications services, and consumer stocks give the VanEck Russia ETF a well-balanced portfolio of Russian stocks.

The iShares MSCI Russia Capped ETF came out a few years after its rival, and it hasn't been afraid to take a more concentrated view of the Russian stock market. Energy stocks make up more than 45% of assets, and materials add another 15% to the total natural resources allocation. Almost a quarter of the fund is invested in financial stocks, leaving only a small portion for telecom, consumer, and utility stocks. The iShares ETF's allocation strategy leaves it more exposed to commodity prices, and the fund will participate less in the growth of areas like the Russian internet industry. However, returns aren't that far off the VanEck ETF's performance, showing how Russian stocks are fairly highly correlated with each other.

Red Square in Moscow.

Image source: Getty Images.

Playing the small game

Emerging market investors have figured out that investing solely in large companies doesn't always give the best exposure to a new stock market. The VanEck Russia Small-Cap ETF seeks to remedy that situation, with a portfolio that is heavy on smaller players in the Russian economy. With just 26 stocks, the ETF is fairly concentrated, but when you look at the sectors that the fund covers, no one area dominates the rest. Materials make up less than 20% of the fund, and energy weighs in at just 6%, showing just how important the huge oil giants are to Russia's energy industry. The small-cap Russia ETF has eked out positive returns even during a tough time for the Russian stock market overall, and investors hope that having greater exposure to faster-growing parts of the Russian economy could help boost these companies even further in the future.

Which Russia ETF belongs in your portfolio?

Among large-cap stocks, Russia is largely a play on natural resources, so investing in the largest Russia ETFs involves hoping for a rebound in oil and metals prices. The small-cap Russia ETF offers an interesting new perspective on the nation, however, and despite a hefty expense ratio, it's worth a closer look for those willing to take on the risk of investing in a nation whose controversial practices still raise tensions across the globe.