The Dow Jones Industrial Average ETF may be a better way to invest in the American economy than the S&P 500. The Dow Jones Industrial Average typically outperforms the S&P 500 over longer periods of time, especially when dividends are factored in. The Russian stock market is one that investors typically fear, but there is reason to believe that this may be one of the best assets to own going forward. Russia currently has one of the cheapest stock markets in the world and trades at the low-end of its historical valuation range. The Russian market is projected to outperform all major markets in the world going forward, once commodity prices recover. For many investors, investing in exchange-traded funds (also known as ETFs) makes much more sense than purchasing individual stocks. This is because the ETF includes many different stocks that allow one to effectively diversify away company-specific risks while still allowing that investor to profit off of a given theme. In this article, we will examine two ETFs that could easily deserve a position in any investor’s portfolio and that will likely prove to be very profitable holdings over the next 25 years. SPDR Dow Jones Industrial Average ETF (NYSEARCA: DIA ) The Dow Jones Industrial Average has been one of the most widely followed indicators of overall stock market activity for more than a century. The index is composed of thirty stocks that the publishers of the index, currently S&P Dow Jones Indices, believe best represent the composition of the United States economy. Unlike most of the other major stock market indices, the Dow Jones Industrial Average is a price-weighted index. This means that companies with higher stock prices such as Apple (NASDAQ: AAPL ), Goldman Sachs (NYSE: GS ), and International Business Machines (NYSE: IBM ) make up a larger portion of the index than companies with lower stock prices such as Coca-Cola (NYSE: KO ) or General Electric (NYSE: GE ). Unfortunately, this also results in these companies’ stock performance having an outsized impact on the performance of the index that may be completely disconnected from their respective market caps. For example, the stock price performance of Goldman Sachs has a 75% greater influence over the index’s performance as Apple’s stock price performance, despite Apple having a market cap more than six times greater. Given these problems with price-weighted indices, one may wonder why I am suggesting an investment in the Dow Jones Industrial Average instead of a broader, market capitalization-weighted index such as the S&P 500. Well, the reason is that the Dow Jones Industrial Average has historically outperformed the S&P 500. This is immediately apparent when we compare the performance of the SPDR Dow Jones Industrial Average ETF to that of the largest ETF tracking the broader Standard & Poors 500 Index, the SPDR S&P 500 ETF (NYSEARCA: SPY ). Here is how the two ETFs have performed over the past ten years: SPY data by YCharts As this chart shows, the S&P 500 ETF outperformed the Dow Jones Industrial Average over the past ten years (although for much of that time, the Dow Jones Industrial Average was outperforming the S&P 500). But, this comparison excludes one very critical factor. The Dow Jones Industrial Average is by and large composed of mature, slow-growing companies that pay out a portion of their earnings to investors in the form of dividends. While the S&P 500 Index does include companies like this, it also includes a number of younger, high-growth companies as well as other firms that for whatever reason choose not to pay dividends. As a result, the Dow Jones Industrial Average typically boasts a higher dividend yield than the S&P 500. This needs to be factored in when determining relative performance. Here is the same chart, this time showing the total return produced by each of the two ETFs over the trailing ten-year period: SPY Total Return Price data by YCharts As this chart shows, the Dow Jones Industrial Average has outperformed the S&P 500 over the past ten years when dividends are factored in (although yesterday’s decline in the Dow brought the two into parity). This outperformance becomes even more pronounced over longer time periods. Here is the same chart showing the total return of both ETFs since the beginning of 1998 (when the Dow Jones Industrial Average ETF was first made available for purchase). SPY Total Return Price data by YCharts As this chart shows, the Dow Jones Industrial Average has significantly outperformed the S&P 500 over longer time periods. It is for this reason that this ETF, and not the one tracking the S&P 500, is my choice for investors interested in making a broad-based bet on the future of the American economy. The SPDR Dow Jones Industrial Average ETF does a respectable job of tracking its underlying index due to the fact that the ETF itself is composed of the same stocks that comprise the index and in relatively similar weightings. Here are all of the ETF’s holdings, sorted by weight: (click to enlarge) Source: State Street Global Advisors As the chart clearly shows, the ETF simply consists of an identical number of shares of each of the companies in the Dow Jones Industrial Average with the relative weightings being determined by the stock price of each company. This is exactly the same way that the index itself is constructed. With that said however, the weighting of each company owned by the ETF is slightly lower than in the index itself due to the fact that the ETF holds a cash position and the index itself does not contain cash. However, the SPDR Dow Jones Industrial Average ETF is still an excellent way for investors to track the index itself. Market Vectors Russia ETF (NYSEARCA: RSX ) At first glance, this may seem to be an unlikely choice for a long-term ETF holding. After all, Russia is a nation that is widely considered to have a high degree of corruption in its business environment, has been economically sanctioned by several Western nations due to recent events in the Ukraine, and is not generally considered to be an investor-friendly place to invest. However, there is much to like here. One of the ratios that can be used to measure the relative stock market valuations present in a nation is the total market cap to GNP ratio. Investing legend Warren Buffett once described this ratio is “probably the best single measure of where valuations stand at any given moment. Using this measure, the Russian stock market is one of the most undervalued in the world. Unfortunately, it can be difficult to obtain accurate GNP information on many countries, but we can calculate the ratio using GDP instead to illustrate this fact. At the time of writing, Russia had a GDP of $2.12 trillion compared to the United States’ $17.7 trillion. Meanwhile, the Russian stock market had a total market capitalization of $380 billion compared to the United States’ $21.88 trillion. Thus, Russia has a total market cap to GDP of 17.9% compared to 123.6% for the United States (lower values indicate a cheaper market). Here is how this compares to other major markets around the world: Source: GuruFocus As this chart shows, the Russian market is only rivaled by Italy in terms of relative valuation. This is very close to the lowest valuation that the Russian market has traded at since it became accessible to investors. Meanwhile, many other markets around the world are near the midpoints or upper ends of their historical valuations: (click to enlarge) Source: GuruFocus This valuation would seem to imply that the Russian market has some of the greatest potential for outperformance going forward. Investment research site GuruFocus performed a complete analysis of the forward return potential present in each country given the historical GDP growth of each of these countries, the dividend payments from each country’s corresponding ETF, and an assumption that each country’s market will revert to its mean valuation. Here are their projections on the returns of each of these markets going forward: Source: GuruFocus As this chart shows, analysts expect the Russian stock market to outperform all other major national markets going forward. However, there are some caveats here. First and foremost, the Russian economy is highly dependent on commodity prices, both energy and metals. As such, the Market Vectors Russia ETF contains significant exposure to energy and commodities companies. As many of you reading this are no doubt aware, commodity and energy prices have fallen significantly over the past year and many analysts expect that prices will be suppressed for quite some time. This has significantly weakened the Russian economy as well as pressured the cash flows and profits at the companies that make up the majority of the ETF’s assets. It is unlikely that either the nation’s economy or corporate profits will recover until commodity prices do and thus it is likely that the ETF will underperform until that occurs. However, I find it unlikely that commodity prices will be depressed over the 25-year period over which this article refers and thus the Market Vectors Russia ETF looks like an appealing investment. Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in RSX over the next 72 hours. (More…) I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Additional disclosure: I have long positions in S&P 500 tracking index funds, but not in SPY specifically.