Still, in some respects it remains a popular BRIC, and its economy looks set for growth in the region of 4.5 per cent this year leading some fund managers to be quietly optimistic about the country's performance.
"In Russia, the government debt/GDP ratio is a mere four per cent, and the country's credit rating outlook from Fitch was recently upgraded to stable from negative," Invesco Perpetual Emerging Europe's fund manager Liesbeth Rubinstein says.
"Public finances in emerging European countries are generally on a sounder footing compared to western European governments, and equity markets in countries such as Russia have shown greater stability and resilience during the current bout of global turbulence," she adds.
She points out that the fund has outperformed the MSCI Eastern Europe index over the one year, and has gained 8.4 per cent over the past three months, with Russian investments largely to thank.
Jupiter Emerging European Opportunities manager Elena Shaftan points to consumer demand in Russia as a potential source to tap.
"Real wages in Russia grew 2.9 per cent in February, further confirming an improving trend that, if it continues, could help fuel a revival in consumer demand over coming months," Shaftan says.
There are three other funds within the retail UT and OEIC universe with an exposure to Russia of greater than 60 per cent; Neptune's Russia & Greater Russia, Invesco Perpetual's Emerging Europe, and JPM's New Europe.
"Russia encompasses all of the major themes of the emerging markets story. Commodities, domestic income, financials and infrastructure are all boosting the economy. While Russia used to be a real boom and bust economy, a new tax levy on oil, which puts money into a stabilisation fund and invests in infrastructure – creating jobs and wealth, softens the blow when commodities drop," Emily Whiting, client portfolio manager for the JPM fund says.
She points out that the geography took a massive hit in 2008, but that the bounce back last year has brought the fund back in line.
Performance of funds over 1-yr
Source: Financial Express Analytics
The chart above shows positive returns to investors over a one year period to mid-April, although all of the funds mentioned underperform the RTS index. However, taking volatility into account speaks better of them; all four were substantially less risky than the index in a 12 month period ended 31 March 2010.
The Invesco Perpetual, Jupiter and Neptune funds took on risk in that period of 22.6 per cent, 24 per cent and 26.2 per cent respectively, with returns of 107.6 per cent, 99.3 per cent and 105.6 per cent.
JPM returned 138.3 per cent at a volatility of 29.6 per cent, while the RTS Index returned 148.3 per cent at a risk of 41.5 per cent.
All four funds are closely linked to the index, with R Squared ratios of between 0.68 and 0.79. The Sharpe Ratios, which show what returns the funds have given over a notional risk-free environment return, are all positive, but low. It is the Invesco Perpetual fund which has returned the most in terms of Sharpe Ratio, 4.61 per cent.
Clearly, as investor appetite for emerging markets swells, Russia-focused funds offers investors a medium volatility/high return option.
"The region fell from fashion for a couple of years, but it is beginning to capture investor interest again," Shaftan adds.