Managers think about growth – Finance – Kommersant

The past year was a failure for the collective investment market. Only one in three retail mutual funds showed gains in unit value, and they were all bond-dominated. The failure of equity funds is associated with turbulence in the Russian market amid the sanctions war of Western countries. In 2023, managers hope for a partial recovery of the stock market, including by maintaining high dividends. In the event of a further decline in inflation, ruble bond funds can provide a yield of 10-15%.

Technological decline

High turbulence in the financial markets in 2022 had a negative impact on the results of management of mutual funds. According to Kommersant’s estimate, based on Investfunds data, out of 174 large mutual investment funds (open-ended and exchange-traded mutual funds with a net asset value of over 100 million rubles), 119 funds lost their unit value at the end of the year. A year earlier, only a third of the funds were unprofitable. There were 11 retail funds with a return of more than 10% at the end of the year (84 – a year earlier), and the growth in the value of a share in the top two funds was 20–22%, while in 2021, more than 40 funds achieved results of 20–60%.

The worst performance was demonstrated by sectoral funds focused on the shares of high-tech, mainly foreign companies.

Such investments have depreciated investments of shareholders by 40-50%. The sector has been among the underdogs worldwide due to the 2022 rate hike by the Fed. The negative effect was reinforced by the depreciation of the dollar at the end of the year, which led to a negative currency revaluation. Investors’ investments in Russian equity funds depreciated by 22-43% against the backdrop of a 43% drop in the ruble index of the Moscow Exchange.

The bulk of the funds that showed a positive result were bond funds. Investments in mutual funds of ruble bonds brought shareholders an income of 2-17%. Moreover, the growth leaders were corporate bond funds. At the end of the year, the RUCBITR corporate bond index of the Moscow Exchange rose by more than 8% to 497 points. The government bond index RGBITR rose over the reporting period by 3.3% to 612 points. The profit of over 20% was demonstrated by mixed investment funds with a dominant share of bonds of Russian issuers.

Dividend Support

Regarding the prospects in 2023, managers are cautiously optimistic. They are looking at equity funds, which, after the 2022 drawdown, can bring investors profit, but in the absence of new shocks. Pervaya Management Company does not exclude the growth of the Moscow Exchange index by more than 25%, TRINFICO Management Company expects growth by 15-20% in a positive scenario, and dividend yield at the level of 10%. “Under the current conditions, the shares of large domestic IT companies, banks, telecoms and energy sector companies look attractive due to the low base effect, state support and relatively low elasticity of demand,” said Yury Grossman, an analyst at TRINFICO Management Company. “Even if there is no strong rise in prices, the income that will be potentially paid out in the form of dividends may significantly exceed deposit rates or bond yields,” said Vladimir Bragin, director for analysis of financial markets and macroeconomics at Alfa Capital Management Company.

The main influence on the dynamics of the index will be provided by the geopolitical situation, as well as the state of the world economy.

According to Vitaly Isakov, Investment Director of Otkrytiye Management Company, news on the sanctions under discussion and the course of the SVO will influence the mood of market participants at the moment, but in the end, the fair price of financial assets is determined by their future cash flows. The latter will depend primarily on the dynamics of commodity markets, as well as on the effectiveness of the restrictive measures taken against Russian exports.

The exchange rate plays an important role in the market. “The Moscow Exchange Index is more than half represented by exporters. The weakening of the ruble may provide additional support to their shares, which will result in a higher growth potential for the index,” says Andrey Makarov, head of the sales department at Pervaya Management Company. According to Vladimir Bragin, in order to diversify the portfolio, an investor can choose sectoral funds, for example, oil and gas and metallurgical companies often have a higher dividend yield than the market average.

Attractive debts

Market participants believe that bond funds retain their growth potential, since with a further decrease in inflation, the Central Bank may further reduce the key rate, which will positively affect the value of shares of such funds. According to Viktor Bark, director of asset management at Alfa Capital, in 2023 such funds are likely to receive double-digit returns. “We do not rule out a short-term insignificant growth (key rate.— “b”) next year against the background of an increase in the budget deficit and increased spending by the state. Therefore, in terms of duration, we build strategies rather conservatively and focus on high-quality corporate issuers that are not so sensitive to changes in interest rates. In our opinion, this will allow investors to receive a double-digit return on an investment horizon of three years,” notes Andrey Makarov. According to Vasily Ivanov, Managing Director of Otkritie Management Company, if inflation is at the level of 5–7% or lower, bond mutual funds will bring 10–15% in 2023.

Vitaly Gaidaev