“Few managers have had such a dramatic impact as Elena Shaftan, manager of Jupiter Emerging European Opportunities,” says Jeff Prestridge in The Mail on Sunday. Shaftan has a “cult following” among financial advisers, attracted by a stellar 203.2% return, compared to the 104.4% sector average over the last three years.
The fund invests mainly in Russia with Hungary (9.95%) and Turkey (8.41%) among other favoured regions. Shaftan, who grew up in Russia, says she believes that in under-researched markets like these, managers who get to know firms can reap the rewards. Also,“it helps when you understand the cultural background of the countries you’re investing in”, she says. The fund favours Russia, where it has a strong bias towards oil and gas stocks. But while Russia has benefited from the surge in the price of natural resources, Shaftan says there is clear evidence that the economy is now driven mainly by domestic demand. Retail sales are growing at more than 12% a year and the financial sector is set to benefit as use of mortgages and credit cards becomes more widespread – hence the fund’s large holding in Sberbank FR.
Convergence in eastern Europe is another key theme. Shaftan thinks EU entry has improved stability in countries such as Poland, the Czech Republic and Hungary, owing to better corporate governance and government regulation. Hungarian commercial bank OTP Bank and Czech energy group CEZ are among the fund’s other main holdings.
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Jupiter Emerging European Opportunities top ten holdings
Name of holding % of assets
Savings Bank of the Russian Federation 9.8
Lukoil ADR 8.9
MMC Norilsk Nickel ADR 6.5
Kazakhmys 4.7
CEZ 4.3
Surgutneftegaz 4.1
Gazprom OAO (ADR) 4.0
Polski Koncern Naftowy ORLEN 3.7
Richter Gordon Plc 3.3
Jsfc Sistema 3.2