Russia is a market with the potential for enormous growth. Yet it remains unloved by investors due to its reputation as a fundamentally corrupt state. But there are “many positives that make the region worthy of consideration”, says Mark Dampier of Hargreaves Lansdown. It is the world’s leading oil producer, for starters, and has 25% of world gas and 20% of world coal reserves – in short, the world’s growing economies need Russia’s resources. “The fact that it is unloved and out of favour simply makes it better value.”
As for a way in, the Neptune Russia & Greater Russia Fund is an attractive offering. It is managed by Robin Geffen, who is “one of Britain’s most experienced investors”, says Charlie Parker in The Sunday Telegraph. His fund has outperformed the Russian market in each of the past five years.
If you had invested £1,000 five years ago, your holdings would now be worth £2,000. The fund has grown by 298% since it was launched in 2004. Its holdings are many and varied, to “reflect Robin Geffen’s view that the Russian economy is far more diverse than many believe”, says Dampier.
The commodities boom has been good for the Russian stockmarket in general. Tensions in the Middle East will strengthen Russia’s trade agreements with countries looking for a stable source of resources. So with the future looking bright in Russia, “I would back Geffen to make the most out of any period of prosperity for the country, with his mix of exposure to the dominant oil and gas players and domestic demand from the country’s emerging middle class”, says Frank Talbot in Citywire.
Contact: 0800-587 5051.
Neptune Russia Fund top ten holdings
| Name of Sector | % of assets |
|---|---|
| Oil & gas producers | 29.55% |
| Industrial metals & mining | 15.87% |
| Food & drug retailers | 15.19% |
| Banks | 9.23% |
| Mobile telecommunications | 8.86% |
| Mining | 7.77% |
| Chemicals | 4.25% |
| Non-classified | 3.59% |
| Cash and equivalent | 2.70% |
| Electricity | 1.17% |