Russian markets tumbled on Monday in response to US sanctions, but investors have described the country’s macroeconomic management as “exemplary” and said the market sell-off is a buying opportunity.
Whitechurch Securities Wealth Managers has abandoned its position in two Russian funds amid growing geopolitical tensions and increasingly expensive valuations in the country.
Russia is regaining appeal for emerging market investors but are there reasons to invest beyond a commodities recovery?
Investors have not seen the end of the lower for longer trade, according to Macquarie Asset Management head of research Dean Stewart, so selecting bonds and equities will require an even more cautious approach.
While Brexit and Trump dominated the headlines, the funds which delivered the best returns in 2016 told a different narrative.
Oil prices and Russia’s fiscal health are highly correlated, and if prices finally stabilise, the market should benefit, according to Egor Kiselev, who manages two Parvest Russia funds.
The MSCI Russia Index has been positive for 18 months while Russia-focused mutual funds have stayed negative.
The importance of structural growth stories in “new Russia”, cannot be underestimated, said Michael Levy, lead manager for the Baring Russia Fund.
63% of delegates at today’s Portfolio Adviser’s Expert Investor Emerging Markets event said they expect to increase their exposure to the asset class in the next year, up from 25% when the same question was asked in February.
Investing in the BRIC concept may seem outdated, while China’s stock market woes have caused concern, but there’s still plenty of reasons to be optimistic about emerging markets.
Turkey and Russia pose the biggest threats to long-term emerging market returns, according to Pictet Asset Management’s Luca Paolini.
Picking up consumer-orientated companies is the best way for investors to capitalise on emerging market GDP growth, says Franklin Templeton Investments’ Mark Mobius.
