After starting the year in a very sharp decline, Russian stocks have rocketed ahead, far outpacing US equities.

RSX

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The Market Vectors Russia ETF (RSX) is up 45% year-to-date compared to a nearly flat performance for the SPDR S&P 500 (SPY).

Russia has made a come back on strengthening commodity prices and RSX’s top holdings GazpromLUKOIL and Rosneft Oil have especially benefited from rising oil prices.  The fund also has holdings in telecom, steel production, mining and electricity generation.

Despite the rapid recovery of stock prices, the economic outlook for Russia remains grim. The official line is that the economy will likely shrink by 2.2% in 2009 while the IMF is projecting a 6% decline.  The negative outlook is based on expectations of weaker domestic consumption, higher unemployment, rising nonpayment on loans by companies and stress in the country’s banking sector.

For more, see the ETF Directory for a complete listing of Country ETFs.