SPECIALISED RUSSIAN GROWTH (SRG) was launched in July 2009. It is a non-typical, non-indexed Russia portfolio. Its investment objective is to achieve long term capital appreciation primarily through investments into listed and unlisted equity and equity-related instruments of companies whose principal operations or assets are located in Russia, or a material part of whose business relates to Russia. The portfolio is index agnostic and is likely to be oriented towards less liquid securities.

Russia is misunderstood by external investors, which leads to over-reactions both during bullish and bearish periods. The domestic market is thin and company information is often not available, leading to opportunities for specialists. As the market grows, it will become more efficient.

Why Russia?

  • Meaningful dividend yields (5%+) compared to EM peers and the world;
  • Russia - still among the cheapest in the EM equity space;
  • Continuing disinflation gives potential for further rate cuts by CBR. Lower rates will lead to greater investment and are likely to lead to stock market gains;
  • Russia - more diversified than you think. While the country’s economic growth is still influenced by commodities, other sectors offer attractively valued investment opportunities for specialists;
  • Government reforms and initiatives: liberalization of non-resident access to local markets, de-offshorization of business, banking system cleanup.

SPRING provides long exposure to the Russian public market through our Specialised Russian Growth Fund as well as managed accounts in the long Russian equities strategy.