Several Russia focused ETFs - iShares MSCI Russia Capped ETF (ERUS Quick QuoteERUS - Free Report) , SPDR S&P Russia ETF , and VanEck Vectors Russia ETF touched a new 52-week high on December 12, 2016. The ETF tracking small-cap Russian companies - VanEck Vectors Russia Small-Cap ETF and the ETF proving leveraged position - Direxion Daily Russia Bull 3X Shares also touched a new 52-week high on the day.

These Russian ETFs have been gaining momentum owing to recovering oil price and election of Russia-friendly Donald Trump as U.S President.

Oil prices received a boost on the new output deal. In order to reduce oversupply and jack up prices, non OPEC members have also agreed to cut their output by 558,000 barrels per day. Of this, Russia will slash 300,000 bpd gradually. Earlier, on November 30, the much-awaited deal on output cut was signed by the OPEC, per which it will slash production by about 1.2 million barrels a day from January (read: Will $60-Oil be a Reality Soon? ETFs to Avoid).

Meanwhile, Russia emerged as a winner post Trump’s win in the U.S. presidential election. The relationship between the two countries was always stressed and took a turn for the worse when Russia seized Crimea from Ukraine in early 2014. But things may change for the better. A pro-Russia view by Trump could support growth of both the countries.

Further, the solid position of the Russian currency, a key Russian export against greenback, has aided Russia-related ETFs (read: Will Russia ETFs Prosper Under Trump Presidency?).

Apart from the above mentioned factors, the World Bank has issued an improved outlook for Russia. As per the latest forecast, Russian gross domestic product will contract only 0.6% in 2016 compared with 1.9% predicted in April this year. The economy is expected to grow 1.5% and 1.7% in 2017 and 2018, respectively.

However, the situation could take a downward turn if oil prices swing southward. Russia’s fiscal reserves are also contracting increasing sustainability risks. As per World Bank, these are expected to decrease from 7% of GDP at the end of 2016 to 3.1% of GDP at the end of 2019.

In a nutshell, the outlook for Russia appears impressive owing to oil price expectations at the current level, making the country an intriguing option for investors. Investors can look at ETFs - ERUS, RBL and RSX for exposure to the country. Investors can also consider small-cap ETF - RSXJ. Small-caps are generally more volatile than their large-cap counterparts. However, they are more closely tied to the domestic economy and have lower foreign exposure. Thus, they are less impacted by global growth slowdown and other political or economic issues driving volatility across the globe (read: 5 Country ETFs to Benefit from Crude Oil's Jump).

Investor looking to book high returns in the short-term period could consider RUSL. Leveraged or inverse ETFs either create a leveraged long/short position, an inverse long/short position or a leveraged inverse long/short position in the underlying index through the use of swaps, options, futures contracts and other financial instruments. Due to their compounding effect, investors can enjoy higher returns in a very short period of time provided the trend remains a friend.

However, these funds run the risk of huge losses compared to traditional funds in fluctuating or erratic markets. Further, their performance could vary significantly from the actual performance of their underlying index over a longer period when compared to a shorter period (see: all Leveraged Equity ETFs here).

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