View more on these topics

Baring Russia open to UK investors

Baring Asset Management has made its Russia fund available to UK investors.

The fund was created in December 2006 from the conversion of the New Russia fund, which launched in 1997. The fund is managed by Barings’ Head of Eastern Europe, Middle East and Africa Equities Dr Ghadir Abu Leil-Cooper. She has 12 years’ investment experience and also runs the Baring Eastern Europe Fund.

Leil-Copper regards Russia as a good investment opportunity because it is benefiting from a strong demand for commodities. As well as oil and gas, Russia supplies commodities such as nickel, copper, palladium and iron ore to meet demand particularly from China.

Demand for commodities, including oil, has allowed the Russian government to pay its debt early and has fuelled development in the domestic economy, creating opportunities in the banking, telecoms, utility and real estate sectors. Consumer demand for goods such as computers and mobile phones is also increasing as more people become middle class.

The strength of the domestic economy is Barings’ main investment theme and this is reflected in the banking and mobile telecoms sectors. Strong demand for office and residential properties in Russia is also creating opportunities within Russian real estate.

Russia has just started to become a more open-market economy and companies are improving business practices such as international accounting standards and improvements in shareholder reporting.

In Barings’ view, corporate restructuring his is helping to create a stable business environment that has attracted international companies such as Ikea and Starbucks. The government is also looking to improve the country’s infrastructure through increased public spending on the back of strong oil revenues.

The Baring Russia fund focuses on attractively valued companies. It favours companies that are likely to benefit from ongoing reform, particularly within the utility sector. Russian companies that have a global competitive advantage are also sought after. Examples are companies in the oil and gas and metals sectors as they are increasing production and reserves at lower costs compared to their global competitors.

However, Russia is still an emerging market economy and the fund is likely to be more volatile than funds investing in developed markets.

Recommended

Scot Life launches adviser podcasts

Scottish Life has launched a series of regular podcasts on its website featuring industry news and issues relevant to advisers. The first podcast of the series features Steve Bee on the Government’s response to his petition for the reassessment of personal accounts and the second will cover defined benefit and defined contribution restructuring.Scottish Life online […]

Factory forecast

The effects of a factory gate pricing system without regulatory changes.

2016 Global Survey of Individual Investors: How is investor behaviour rewriting the job description for financial professionals?

Trapped between expectations for near double-digit returns and strong apprehensions about investing in persistently volatile markets, investors worldwide are of the opinion that professional financial advice is worth the fee. But even though they believe individuals who work with a financial professional are more likely to achieve their goals, investors have a clear vision of […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment