Which funds generated income in the winter months

The winter months turned out to be more successful for the collective investment market than the autumn months. Only a few retail mutual funds have shown decline in unit value. The best results were shown by funds of high-tech companies, mainly with Russian issuers. Portfolio managers expect the Central Bank to move to a lower key rate, which will support the value of bond fund units.

Growth all around

Portfolio managers performed better in the winter months than in the autumn months. According to Investfunds, over the past three months, out of 150 large retail funds (OPIFs and BPIFs with assets over 500 million rubles), 146 funds brought income to shareholders. At the same time, every third fund’s income exceeded 5%, and the top six exceeded 10%. In the previous season, the results were noticeably worse – only a third of the funds were profitable, while there was not a single fund that showed double-digit returns.

The best results for the reporting period were demonstrated by industry funds focused on investing in shares of high-tech companies or occupying a high share in portfolios. According to Investfunds, the value of shares of such mutual funds increased by 10–13.3%. This happened against the background of the rise of this sector in both the American and Russian markets. Since the beginning of the year alone, the S&P 500 Information Technology Index is up almost 12%, while the S&P 500 Index is up only 7%. During the same time, the Russian industry indices of “Information Technologies” and “Telecommunications” grew by 20%, significantly ahead of the MOEX index (just over 5%).

Limitless IT

The American stock market is growing on expectations that the Federal Reserve will begin to lower the discount rate. The first reduction is expected in June of this year, and lower borrowing costs will give US companies a competitive advantage. “Incoming macroeconomic data indicate stable growth in the American economy, and this growth is especially noticeable in comparison with other developed countries teetering on the brink of recession,” notes Oleg Novikov, investment director at Astero Falcon. Adding optimism to investors in the American market are the financial successes of large technology companies, which for the most part report better than analysts’ expectations. “All three factors are long-term advantages of the American stock market,” says Mr. Novikov.

The main reason for the growth of shares of Russian high-tech companies is the departure of foreign companies from the Russian market, as a result of which a significant market share was simultaneously freed up.

Mikhail Nesterov, head of the analytical department of TKB Investment Partners, notes that with the departure of Google, Meta (recognized as extremist and banned in the Russian Federation) and a number of other players, about 30-35% of the share of online advertising was freed up. The main beneficiaries were Yandex, VK Group and Ozon. In the cybersecurity market, foreign players occupied about 40% of the market, estimates Mikhail Nesterov. In his opinion, this makes it possible for Russian suppliers of similar solutions to increase sales by 30–40% per year in the next four years and ensure almost complete import substitution in this segment.

Debts are gaining weight

Outsiders of the autumn months – ruble bond funds – also brought profit to shareholders. According to Investfunds, for the most part mutual funds of corporate bonds or with a dominant share of such securities showed an increase in the value of the unit by 2–4%. At the same time, the cost of shares of mutual funds of government bonds increased only by 0.5–1.5%. Over the winter months, the Moscow Exchange corporate bond index RUCBTRNS increased by 2%, while the government bond index RGBITR decreased by 0.4%. However, through active fund management, management companies managed to outperform the indices.

The result of such investments could have been even better, but in the last winter month, bonds came under pressure from the February meeting of the Central Bank. Although his decision to keep the key rate at 16% was expected, the overall tone of subsequent statements was harsh. The main negative factor was the discussion at the last meeting of the Board of Directors of the Central Bank of both maintaining the key rate at the current level and increasing it to 17%. “Harsh rhetoric has led to additional pressure on the long-term OFZ segment in addition to regular placements by the Ministry of Finance. The corporate segment of the market reacted weakly to the decision on the rate; we see strong demand for initial placements with a fixed coupon,” notes the head of the asset management department of Alfa Capital Management Company Viktor Bark.

Currency bond funds continue to show better results. Shares of such funds increased in price by up to 6%. The high result was achieved due to both currency revaluation and the growth of quotes for such bonds. Since the beginning of autumn, the index of replacement bonds, which is a benchmark for many similar mutual funds, has grown by almost 5%, during the same time the index of yuan bonds has grown by 0.6%.

Waiting for easing

Portfolio managers expect a continued rise in the stock market, but are cautious about the prospects for ruble bonds. According to experts from Management Company Pervaya, by the end of the year the Russian stock market may grow by 30%, while the growth in quotations may be up to 20%, and the dividend yield may be about 10%. “We see the main potential in the companies that will undergo the redomiciliation procedure this year—mainly Russian IT companies, whose business has grown exponentially in recent years,” notes Andrey Makarov, head of the sales department of the management company.

Bond funds will be able to emerge from the shadow of equity funds only when the Central Bank moves to a looser monetary policy. MC Pervaya expects a gradual reduction in the key rate starting in the summer. “As the key rate decreases, bond prices will rise, which will be positive for bond funds,” notes Victor Bark.

Vitaly Gaidaev