For most Americans, the Russia-Ukraine crisis has only been troubling from a humanitarian perspective. The crisis hasn't affected the U.S. stock market—the S&P 500 is down just 1 percent since the Crimean referendum was announced on March 6—and the vast majority of investors don't have money in the region.
Out of the $8 trillion invested in U.S. equity funds, only $30 billion is in Russian securities, while about $1.3 billion of that is in Russian-focused mutual and exchange-traded funds, according to Lipper Research, a mutual fund data and research company.
However, there will be some investors, especially ones with diversified global portfolios, who have more exposure to Russia than they may think. That's because most emerging market funds will have some money in the country, said Robert Jenkins, Lipper's head of research.
A typical BRIC fund—an emerging market fund with investments in Brazil, Russia, India and China —will have about 15 percent of its assets in the region, while a fund focused on Europe, the Middle East and Africa (EMEA) will have about 25 percent of its assets in the country, he said. A broad-based emerging market fund will usually have a 5 percent exposure to Russia.
"There has been this globalization push that in order to be diversified you need to own a reasonable piece of emerging markets," said Jenkins. "That could impact some portfolios."
Most BRIC funds are down 5 percent to 7 percent year-to-date and while that has a lot to do with China's slowing growth and money moving back into the recovering U.S. market, Jenkins pointed out that half of that decline has come in March.
If an investor owns an actively managed mutual fund, it's possible that the portfolio manager has reduced his or her Russian exposure since the Crimean crisis began.
ETF investors, though, will have to take matters into their own hands.
Aniket Ullal, founder of First Bridge Data, a Fremont, Calif.–based ETF data provider, explained that not all emerging market ETFs are created equal. Investors could be holding a security that has more exposure to Russia than another.
For instance, the iShares MSCI BRIC ETF, the largest passive BRIC fund by net assets, has a 12.6 percent allocation to Russia. The second largest one, the Guggenheim BRIC ETF (EEB), has a 25 percent exposure to Russian stocks, while the third biggest, SPDR S&P BRIC 40 ETF has a 20.8 percent exposure to Russia.
The percentage of assets in Russia even varies among the broadest-based emerging market ETFs. The Vanguard FTSE Emerging Market ETF (VMO), the world's largest emerging market fund, has a 5.3 percent stake in Russia, while the WisdomTree Emerging Markets Equity Income ETF (DEM), the third largest emerging market ETF, has an 18.8 percent exposure to the country.
Just because you may have some assets in Russia doesn't mean you should dump your emerging market fund, said Ullal, but you may want to swap the one with higher exposure out for one that has a lower weighting to the country.
Some investors may actually want to buy more Russian securities today, said Patricia Oey, a senior fund analyst at Morningstar.
The country's market is incredibly inexpensive—the MICEX is trading at about five times earnings, much cheaper than other emerging markets—and unless a full on war breaks out, it would be harder for its value to decline further from here.
"Some fund manager who is very value oriented might be picking up Russian stocks," she said. "They're so cheap."
Of course, the stocks are cheap for a reason. It's impossible to predict President Vladimir Putin's next steps, there have been issues around the rule of law and the government has a history of taking corporate assets whenever it feels like it.
If you can stomach the volatility, though, and believe that country's stock market, which is down about 20 percent year-to-date and 7.6 percent over the last four weeks, can rise again, then this could be an entry point for investors.
There are 140 mutual funds and ETFs that have more than a 5 percent allocation to Russia, with six—five ETFs and one mutual fund—having more than a 90 percent exposure, according to Lipper.
If you want direct exposure to the region, buying one of these funds is best. The largest Russian fund by net assets is Market Vectors Russia ETF (NYSE Arca: RSX), said Ullal.
However, if the crisis worsens and sanctions are put into place, these funds could have trouble rebounding. Energy and materials are Russia's two largest sectors and any fund that has any allocation to the country will likely have a majority of its money in these two industries.
Even before the Crimean crisis, energy and materials were suffering, said Jenkins. China's slowdown has resulted in less demand for commodities and that's hurt global energy prices.
Now, though, Russia's biggest sectors could be affected by sanctions and a desire by Europe—which gets about 30 percent of its oil and gas from the country—to look elsewhere for its energy needs.
If this happens, Russian funds will certainly suffer further.
"On a macro level this is a big headwind," said Oey. "If sanctions happen and Western banks cut off funding then these stocks will be hampered."
While most U.S. investors don't have to worry about Russian stocks in their portfolio, the one's who do will have to decide whether or not they can stomach more volatility.
Though, at this point, if you haven't sold off your stake, then you may just want to hang on, said Jenkins.
"Retail investors who hold these funds have already seen a significant decline," he said. "I can't imagine how jumping out now will be helpful to you. You held on this long, so it might be best to let it come back."