Profitable revaluation – Finance – Kommersant

The last winter month, like the previous one, pleased private investors in the collective investment market. At the same time, for the second month in a row, the best dynamics was demonstrated by funds oriented to foreign assets. Managers are counting on an acceleration in the growth of Russian stocks on the back of good reporting and decisions on dividends.

high tech income

February portfolio managers have worked well, but noticeably worse than January. According to Investfunds, last month, out of 119 large retail funds (open-ended and exchange-traded mutual funds with assets over 500 million rubles), more than 100 funds brought income to shareholders. At the same time, only ten funds had an income above 5%. A month earlier, the results were better: every fifth fund returned more than 5%, and the top six provided a 10-17% increase in the value of a share.

As in the previous month, the best results were shown by funds focused on investments in shares of high-tech companies.

According to Investfunds, the value of shares of such funds grew by 8-9% over the month, by almost 12-17.5% a month earlier.

“For the growth of the capitalization of IT companies, it was enough that it sank the most in 2022. Therefore, investors who expect the recovery of the US and European stock markets against the backdrop of the end of the tightening of monetary policy by central banks showed interest in them. Lost profit syndrome was also a strong factor, namely, the strong growth of IT sector companies in January, in which not all investors participated,” notes Sofia Kirsanova, portfolio manager at Pervaya Management Company.

Course additive

About 5% of the income was brought by mutual funds of American and European stocks, as well as emerging markets. The positive dynamics of such equity funds was ensured by currency revaluation against the background of the growth of the dollar in Russia by 7.4% or point histories. “Major US stock indices sank by the end of February within 2% amid heightened concerns about further tightening of monetary policy by the Fed. The European Eurostoxx50 at the same time grew by almost 2% due to the release of strong macro statistics,” says Kirill Tereshchenko, an analyst at RSHB Asset Management.

The currency revaluation also had a strong impact on other funds with foreign exchange assets, such as gold, eurobonds, replacement bonds and yuan bonds.

Investments in such mutual funds brought shareholders an income of 2–4.8%. “For funds focused on investing in Eurobonds, a significant factor is the exchange rate of the ruble against the respective currencies. So, if prices for Eurobonds and replacement bonds traded on the Moscow Exchange have decreased since the beginning of the year, then the depreciation of the ruble against the dollar and the yuan by 7.5% and 10%, respectively, allowed the funds to provide profitability in the first two months of 2023,”— notes Ivan Lavrinenko, investment director of RB Capital.

Sectoral funds focused on the metallurgical and oil and gas sectors brought good profits to shareholders, shares of such funds added 3-4% in price. Mutual investment funds of the broad stock market brought investors an income of 0.6-1.4%, in February the Moscow Exchange index rose only by 1.2%, to 2253.2 points.

Investments in mutual funds of ruble bonds brought shareholders an income of 0.2-0.7%, while the fund of inflationary OFZs earned more than 1.5% against the backdrop of increased inflationary expectations.

“In February, due to fears of escalation in Ukraine, expectations of tighter monetary policy of the Bank of Russia and new sanctions, ruble bond quotes fell. Also, the bond market was affected by new placements both in the state and in the corporate segment, pulling over part of the demand from the “old” issues,” notes Yury Grossman, portfolio manager at Trinfico Management Company.

Waiting for dividends

Further dynamics in the Russian stock market in the coming months will be determined by the publication of operating and financial results of issuers for 2022, as well as their decisions on dividends. On Friday, the board of directors of PhosAgro already recommended a record dividend of 465 rubles for last year. per share, which provides a dividend yield of 6.9%. “From oil and gas companies, market participants will be waiting for the announcement of dividends for 2022, assuming that the figure will be high, given that oil and gas prices remained high for most of the year, which supported the free cash flow of exporters,” says Sofia Kirsanova.

News from non-Russian issuers about redomiciliation, as well as the factor of geopolitics and sanctions, will also be important for the market. “Ceteris paribus, especially if we do not include an increase in the Central Bank’s rate, we rather expect the positive dynamics to continue. Because, even based on analysts’ estimates, most companies on the Russian market have a growth potential of 30-50%,” says Ms. Kirsanova.

In the case of more conservative bond funds, mutual funds oriented towards both ruble and foreign currency securities may be interesting for investments.

According to Yuri Grossman, it is still quite difficult to overtake the current ruble inflation (11% per annum in February) by investing in low-risk instruments, since the yield to maturity of one-year and five-year OFZs is 7.5% and 10% per annum, respectively. In corporate issues of the second tier of the same length, the yield is 8.5% and 11.5% per annum, respectively. But actively managed ruble bond funds may still be of interest. “Dollar bond funds are now easier to outperform inflation in their respective currencies thanks to the high current supply of replacement bonds, which, combined with the isolation of the Russian bond market, gives a yield to maturity of 5-8% per annum, and this is a really good moment to enter,” notes Mr. Grossman.

Vitaly Gaidaev