The Russian market is back in favour. After falling 67% in the nine months to March, it’s since rallied 80% as global risk appetite has increased and the oil price has rebounded. Whether this recovery is permanent is another matter. But if it is, the Neptune Russia and Great Russia Fund, managed by Robin Geffen, is one of the best ways to play it.
Often tipped as the “next Anthony Bolton”, Geffen puts his own capital on the line, investing in the fund himself. A graduate from Keble College, Oxford, he believes it’s not too late to benefit from the Russian revival. He cites stocks such as oil giant Gazprom, which trades on a “ridiculously cheap” 3.5 times earnings. The energy group is his fund’s biggest holding, accounting for 10% of assets. With oil north of $55 a barrel, “the rally looks solid and there is renewed confidence in the Russian consumer”.
Indeed, Geffen is a big fan of consumer stocks. The top end of the country might like their Mercedes saloons and Cartier watches. But the middle class, which has risen in size from 8% to 24% since 2000, is beginning to plump for Russian over foreign brands when they head to the supermarket. In that regard, the strikingly-named Wimm-Bill-Dann, one of Europe’s biggest dairy products companies, is also a firm favourite. It is 20% owned by Danone.
There’s another reason to buy though: “it’s the only unit trust investing solely in Russia”, says Mark Dampier at IFA Hargreaves Lansdown. “I have it in my own self-invested personal pension and it’s my favourite way of playing the market.”
Contact: 0126 844 3920.
Neptune Russia and Greater Russia top ten holdings
| Name of holding | % of assets |
|---|---|
| Gazprom ADR | 11.3 |
| Norlisk Nickel ADR | 8.63 |
| Wimm-Bill-Dann Foods ADR | 8.14 |
| Polyus Gold ADR | 7.85 |
| Lukoil ADR (UK listed) | 6.39 |
| Rosneft Oil GDR | 6.01 |
| Surgutneftegaz ADR (US listed) | 5.27 |
| Uralkali | 5.21 |
| Mobile Telesystems ADR | 5.01 |
| Vimpel-Communications ADR | 4.01 |