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. Last Updated: 07/27/2016

Rencap, MSCI Unveil New Equities Tracker

Renaissance Capital and MSCI Barra on Wednesday together unveiled an equities index of Russian stocks that trade locally and abroad. RenCap has also opened an index fund that tracks the performance of the index.

The MSCI Renaissance Index represents the performance Russian stocks with more than $1 million in daily trading-stocks with enough liquidity to attract money from large Western funds.

Unlike the RTS Index, which only includes local shares, the MSCI Renaissance Index includes stocks such as Evraz, Pyatyorochka, and Golden Telecom that only trade in New York or London.

The weighting of various stocks is determined by a company's free float, or the value of its shares trading among the public, rather than the company's total market capitalization. The index represents a total of $239 billion in free-float equity, according to RenCap.

Gazprom comprises more than 40 percent of the primary MSCI Renaissance index, but MSCI Barra also released a "capped" version of the index in which no stock can make up more than 20 percent.

Besides the index, RenCap said it had opened an exchange-traded fund on the Irish Stock Exchange that allows investors to buy into the entire Russia index with a single trade. The fund has attracted just $20 million from investors, but Oleg Jelezko, head of equity-structured products at RenCap, said he hopes the fund will manage $1 billion in 12 months.

The RenCap exchange-traded fund carries an annual expense ratio of 1 percent. ETFs that track U.S. stock indexes have expense ratios of as little as one-tenth of 1 percent.