Russian stocks were the worst performing asset class last year but Jupiter Asset Management’s Colin Croft who manages the £100m Jupiter Emerging European Opportunities Fund, has noted to FE Trustnet that the last time the Russian stock market was this out of favor, it roared back and doubled investors’ money over the following 12 months. Specifically, he pointed out that December 2008 was the last time it was the “end of the world” for Russia stock funds as oil price had fallen from an all-time high of $145 to just $34 a barrel:
“At the time, it felt like the worst possible moment to invest in Russian equities, and if anyone had advised you to do so, you would have thought them to be completely crazy. Yet anyone ‘crazy’ enough to put their money to work in Russia that December would have doubled it in little more than a year, although there is no guarantee that this type of event will happen again.”
Following losses of 73% between May and October 2008, the MSCI Russia index rallied over the following 14 months to return more than 130% between its lows in October 2008 and the end of December 2009.
And what about those low oil prices? It was observed:
“My view is that oil prices can’t remain at current levels for too long… eventually the invisible hand of the market is likely to work its magic. Already we are seeing high-cost producers cutting investment, and on the demand side we may well see consumers starting to use more fuel as it becomes less expensive for them to do so…. It may take time for these forces to make themselves felt – but as the examples of 1998 and 2008 show, neither excessively high oil prices nor excessively low oil prices last indefinitely.”
It was added that the threat from more Russia sanctions is now factored into the Russian stock market’s extremely low valuations which haven’t been this low since 2008.
To read the whole article, Jupiter’s Croft: If history repeats itself, these funds could double your money in a year, go to the website of FE Trustnet. We also have a list of Russia ADRs here and Russia closed-end funds here.
- Emerging Market Hedge Fund Assets Rise to a Record Despite Russian Losses (PR)
- Do You Need to Putin-proof Your Portfolio? (FE Trustnet)
- Investment Implications of the Russian Invasion (Franklin Templeton)
- The Crimea: Already The Next Hot Real Estate Market? (MT)
- Russia Promises Guaranteed Support If You Invest in the Crimea (RIA)
- Resolving the SE Ukraine Conflict Would be a “Massive Buy Signal” for Russia (CNBC)
- EU Slowly Weening Off Russian Crude Gives Moscow Time To Divert Flows To Asia (Zero Hedge)
- How Canaccord Genuity’s Oliver is Hedging for Iraq & Ukraine Turmoil (FE Trustnet)
- Russia Moves Up 11 Places in the Global Competitiveness Report (MT)
- Franklin Templeton’s $7.6bn Bond Bet on the Ukraine is 6X Bigger Than its Russian Bond Holdings (EM)
- Russia Consumer Confidence Falls in Latest Nielsen Survey
- Ukraine War Poses a Threat to EU Industry (RaboResearch)
- Gazprombank GPB Hires Former Senators Lott and Breaux to Fight Russia Sanctions (CPI)
- Russia Troubles Hit Emerging Markets – Including Emerging Europe (Barron’s)
- Infographic: Russia’s Sphere of Influence in Context (VOX)