An exchange-traded fund of Russian stocks gained in New York trading as the European Union’s proposed sanctions to punish the country for its support of separatists in Ukraine weren’t as deep as some investors had expected.

The Market Vectors Russia ETF, the largest U.S. dedicated exchange-traded fund tracking the nation’s companies, increased 0.6 percent to $25.09 as of 3:30 p.m. in New York. American depositary receipts of OAO Mechel and OAO GMK Norilsk Nickel advanced as much as 1.7 percent. The Bloomberg Russia-US Equity index slipped 0.2 percent to 86.54 after rising as much as 0.4 percent earlier.

The ETF gained as a draft document obtained by Bloomberg showed the European Union is preparing to sanction top Russian security officials and did not mention targeting any major companies. The 28-member bloc is also considering a ban on European purchases of bonds or shares sold by Russia’s state-owned banks among the options for stepped-up measures against the Kremlin, according to a proposal presented to member states.

“Investors are relieved,” Ilya Kravets, the New York-based director of investment research at Daniloff Capital LLC, said by phone. “The market expected much tougher sanctions, and that hasn’t materialized so far.”

The U.S. and EU have sought to isolate President Vladimir Putin for supporting separatists in eastern Ukraine. Last week’s downing of Malaysian Air flight MH17, which the U.S. says was probably destroyed by a Russian-made missile system, has galvanized international sentiment against Putin. The rebels deny they shot down the jet. The crash killed all 298 people aboard.

‘Cautious’ Sentiment

“A resolution of the situation is required for a more sustainable recovery for Russia, and the risk, of course, is not only a prolonged standoff, but also harsher sanctions,” Jose Morales, who oversees $2.5 billion in global equities at Mirae Asset Global Investment in New York, said by e-mail yesterday. “We remain positive on Russian privately owned companies and consumption-related stories.”

The U.S. and EU have imposed measures including travel bans and asset freezes for Putin allies following Russia’s annexation of the Black Sea peninsula of Crimea in March. The U.S. also has blocked OAO Rosneft, OAO Novatek, OAO Gazprombank and Vnesheconombank from accessing American equity or debt markets for new financing with maturities longer than 90 days.

RTS stock-index futures rose 1.1 percent to 126,630. The RTS Volatility Index decreased 4.2 percent to 32.21.

Mechel, Russia’s biggest coking-coal supplier, jumped 3 percent to $2.05, the best performance on the Bloomberg Russia-US Equity index today. The index is down about 15 percent this year.

“The sentiment remains cautious toward Russian equities,” Mirae’s Morales said. “New sanctions are still a possibility given the ongoing stand off. This will continue to put pressure on Russian equities in the near term and will also have a negative impact on economic growth.”