ETFs are being utilized by investors to trade the Russia-Ukraine conflict.

Amid Russia's war on Ukraine, exchange-traded funds are increasingly being selected by investors as their preferred investment vehicle.

The largest Russia-based ETF on the market, RSX, is experiencing its worst week on record, with a decline of over 53%. Additionally, February was the fund's worst month ever, resulting in a nearly 55% loss in value.

ETFs have a unique characteristic that allows them to be traded even when the underlying assets are not, according to Jan van Eck, CEO of Van Eck Associates, who spoke on CNBC's "ETF Edge" on Monday.

Van Eck stated that approximately 75% of RSX's holdings consist of ADRs, which are essentially U.S.-listed foreign company proxies, or GDRs, which represent internationally listed names.

According to him, only approximately 11% of the ETF's assets are invested in local Russian stocks, 7% in U.S.-listed stocks, and 7% in London-listed plays.

The CEO stated that the dispersion of the ETF allows it to function as a pricing mechanism, despite the Russian market remaining inaccessible to international investors.

Van Eck stated that the true separation lies in the financial sector, with some banks facing penalties due to sanctions.

As long as energy companies continue to do business, ETFs should operate successfully in the market, especially if Europe needs Russian gas and is willing to pay for it.

The ERUS is RSX's closest competitor, with a 57% decline in value this week.

Todd Rosenbluth of CFRA Research stated that RSX is currently trading at a higher volume than it has ever experienced.

Nearly double the historical 20-day average of ETF volumes occurred on Feb. 24 when Russia invaded Ukraine, according to State Street Global Advisors.

According to Rosenbluth, senior director of ETF and mutual fund research at his firm, it has been observed repeatedly that when the market becomes volatile, ETFs are preferred by investors as the ideal investment vehicle.

Unlike other markets or vehicles, the ETF marketplace allows you to enter or exit at any time, which is why it continues to attract record inflows.