6 ETFs To Watch As Russia-Ukraine Crisis Heats Up

Author: Wayne Duggan | February 23, 2022 03:28pm

Extreme volatility in the U.S. stock market continued on Wednesday as the S&P 500 gave up early morning gains and dipped back into negative territory once again in mid-day trading.

For now, all eyes are on Ukraine as investors anticipate Russian President Vladimir Putin's next move and the potential reaction from the U.S. and other nations around the world.

Latest Developments: While geopolitical uncertainty has created volatility in U.S. markets, it has generated even more volatility in a handful of stocks tied to the Russian market and leveraged funds tracking market volatility.

The latest development on Wednesday morning is a major mass distributed denial of service (DDoS) attack on Ukrainian banks and government websites. Russia has yet to be confirmed as the source of the attack, but its timing is suspicious given Russia has been positioning troops for a potential invasion of Ukraine in recent days. Russia has denied responsibility for a previous cyberattack that brought down four Ukrainian government websites.

On Tuesday, U.S. President Joe Biden announced new sanctions on Russian banks, sovereign debt and individuals in response to its aggression toward Ukraine. Biden also warned that "we have our next move planned as well."

How To Play It: Investors looking to play the volatility created by the drama in Ukraine should start with these six ETFs:

VanEck Russia ETF (BATS:RSX): The RSX fund tracks the MVIS Russia index and provides investors with exposure to Russian equities. The RSX fund is down 31.7% in the past six months.
Ishares Msci Russia ETF (NYSE:ERUS): The ERUS fund also tracks the MVIS Russia index and is down 30.8% in the past six months.
VanEck Russia Small-Cap ETF (BATS:RSXJ): The RSXJ fund tracks the MVIS Russia Small-Cap index and provides exposure to highly volatile Russian small-cap equities. The RSXJ is down 30.2% in the past six months.
Direxion Daily Russia Bull 2X Shares (NYSE:RUSL): The RUSL fund provides 2x exposure to the MVIS Russia index. Not surprisingly, the RUSL fund is down 52.1% in the past six months.
Direxion Daily Oil Services Bull 2X Shares (NYSE:ONG): The ONG fund providex 2X exposure to the MVIS US Listed Oil Services 25 Index and is up 18.8% in the past month.
Barclays iPath Series B S&P 500 VIX Short-Term Futures ETN (BATS:VXX): The VXX fund provides exposure to the S&P 500 VIX Short-Term Futures Index Total Return, a market volatility tracker. The VXX fund is up 31.4% year-to-date in 2022.