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Manager focus: Elena Ogram

Julius Baers decision to open its Luxembourg-domiciled Russia fund to British retail investors came as a surprise. After all, investors have avoided the Russian market for months.

Elena Ogram, the fund manager, says the market bears higher risks but also potential higher returns.

With increased tensions with the West, stockmarket volatility reached a level that prompted Russian authorities to suspend Russias two main stock indices, the Micex and RTS, on 23 separate occasions over a period of only two months.

Natural resources including oil, gas, steel and precious metals are important parts of the economy and Russias equity market is heavily weighted towards companies that produce and export commodities or commodity-related products. Because of this, the country was hit badly last year as oil prices collapsed and commodity prices plummeted from record highs.

Despite recent data suggesting that the market is recovering, there is still uncertainty in the market. Ogram says commodity and equity prices are now on the rise again.

She has allocated the funds assets as close to the benchmark as possible. Ogram says she is sceptical of the steel market, but positive on energy and basic metals, not least because Chinas demand is on the rise again.

She has allocated 35% of the fund in energy, 25% in metals and mining, 10% in utilities, and 10% in telecoms.

Ogram says Russia remains an interesting market, despite its high volatility. The country has one of the biggest oil reserves in the world and has been buoyed by rising oil prices, which have doubled since February this year. Russian equities have also risen 100% from February.

She also expects political relations with the US to improve under the Obama administration. She says the two countries have begun to realise that they need each other. Although Russias foreign reserves are now about one-third lower than last year, they are still high.


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