Asset Management

Don’t buy Russia’s stocks — buy its bonds

Investors have good reason to remain cautious on Russia — but the country is better armored against financial attack these days

Don’t buy Russia’s stocks — buy its bonds
Photo: Illustration: Adam Maida

The recent allied air raid on Syria may not do much to deter Russia’s client there, Bashar al-Assad. But the US financial sanctions that preceded it hit Russian securities like a bombshell.

The VanEck Vectors Russia exchange-traded fund has dropped by more than six percentage points since the Treasury Department’s April 6 announcement. The ruble is down 5.3% against the dollar, and yields on Moscow sovereign bonds have risen by almost half a percentage point. This despite a relief rally since April 16, when Donald Trump nixed his United Nations Ambassador Nikki Haley’s promise to pile on yet more sanctions.

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